Liberty Variable Investment Trust
Colonial Growth and Income Fund, Variable Series
Stein Roe Global Utilities Fund, Variable Series
Colonial International Fund for Growth, Variable Series
Colonial Strategic Income Fund, Variable Series
Colonial U.S. Stock Fund, Variable Series
Newport Tiger Fund, Variable Series
Liberty All-Star Equity Fund, Variable Series
Annual Report
December 31, 1997
<PAGE>
<PAGE>
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PRESIDENT'S LETTER
Liberty Variable Investment Trust
Stein Roe Variable Investment Trust
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Dear Fellow Contract Owner:
We are pleased to present this annual report for the Liberty Variable
Investment Trust -- Colonial Growth & Income Fund, Variable Series; Stein Roe
Global Utilities Fund, Variable Series; Colonial International Fund for Growth,
Variable Series; Colonial U.S. Stock Fund, Variable Series; Colonial Strategic
Income Fund, Variable Series; Newport Tiger Fund, Variable Series and Liberty
All-Star Equity Fund, Variable Series -- and the SteinRoe Variable Investment
Trust -- Stein Roe Special Venture Fund, Variable Series; Stein Roe Growth
Stock Fund, Variable Series; Stein Roe Balanced Fund, Variable Series; Stein
Roe Mortgage Securities Fund, Variable Series; and Stein Roe Money Market Fund,
Variable Series. In the following pages, we will provide you with an overview
of the economic events that occurred over the past year and explain how we
positioned the funds to respond to these events.
Stocks Continued Their Surge
Coming out of the 1996 bull market, the stock market continued its upward
climb, with the Dow Jones Industrial Average (DJIA) setting new record highs on
nearly half the days in January 1997. Market strength continued throughout the
first quarter, buoyed by healthy economic growth, strong corporate profits and
low inflation. Continued strength in net new subscriptions to mutual funds --
partially reflecting the increasing commitment to stocks on the part of the
80-million-strong contingent of baby boomers -- also fueled the market's
growth. Now between 35 and 50 years old, baby boomers' appetite for investing
reflects their awareness of the increased savings and capital accumulation
they'll need for retirement.
Concern about slowing earnings momentum, however, prompted many investors to
shy away from smaller growth stocks in favor of the relative liquidity and
predictability of large-cap stocks. By March 1997, investors had begun to
realize that the steady bull market could be buffeted by stepped-up
inflationary pressures resulting from too-strong economic growth, too-low
unemployment and rising wage rates. As a result, the Federal Reserve sought to
put the brakes on the economy, raising the federal funds rate by one-quarter
percentage point to 5.50 percent in late March.
Although many market watchers expected this rate hike, markets stumbled
enough to offset much of the gains achieved in the first weeks of the year.
Nonetheless, the Standard & Poor's 500 Index ended the first quarter with a
modest 2 percent gain.
After Federal Reserve Chairman Alan Greenspan took the podium in May,
reporting that economic growth was firmly under control, it appeared that
concern over inflation was no longer an issue at the front of investors' minds.
In fact, in the second quarter, the S&P 500 enjoyed a near-record run,
returning 17 percent. While the strongest gains still belonged to larger-cap
stocks, the pendulum began to swing back for small-caps during the quarter.
After months of being passed over, small-cap stocks were attractively priced.
This, coupled with solid profits, sparked a rally among smaller-cap stocks in
the waning weeks of the second quarter of 1997. News of a potential balanced
budget, strong profits reports in May, and Greenspan's optimistic read on the
economy helped buoy stock and bond prices.
In July, at the beginning of the third quarter, large-cap stocks continued
their upward surge, boosted in part by strong global economies and reports of
greater-than-expected earnings. The DJIA reached a new high, with the blue-chip
index's performance representing its largest-ever point gain for any month in
its 101-year history. In fact, the DJIA cleared 8000 for the first time ever.
Also in August, the government passed the Taxpayer Relief Act of 1997. The
first federal tax cut in 16 years, the act includes a number of provisions
benefiting investors nationwide.
Asia Feints . . . and America Blinks
International markets had a mixed first half of the year with some markets
producing strong growth and others reflecting currency pressures. During this
time, the U.S. dollar strengthened against local currencies. Overseas markets,
and particularly Asia, disappointed for the most part in the third quarter,
primarily driven by a weak Japanese economy and the devaluation of several
Southeast Asian currencies.
Excess debt, overcapacity and what may have been unwise economic and fiscal
policies sparked this devaluation. The resulting currency crisis struck many
Southeast Asian economies and then sparked a surprisingly severe crash in Hong
Kong. By the fourth quarter of 1997, this sequence of events finally unnerved
investors in developed countries. The result: sharp declines in all of the
major markets, including the United States. Stocks fell more than 550 points in
one day of trading on Oct. 28, 1997.
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PRESIDENT'S LETTER
Liberty Variable Investment Trust
Stein Roe Variable Investment Trust
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The currency crisis in Asia stabilized somewhat in December, with the
International Monetary Fund providing resources to South Korea, and several
other governments proposing plans to get their economies to a more healthy
state. While it appears that these countries are addressing their severe
economic problems, we expect that for certain countries, the path to recovery
will be long and difficult.
The International Monetary Fund's actions, coupled with strong domestic
growth, helped give investors the confidence to support a recovery in U.S.
stock markets. As a result, December gains concluded the third year in a row in
which the S&P 500 logged an overall gain of more than 20 percent. In fact, the
S&P 500 Index closed 1997 with a 33.35 percent return, while the DJIA posted a
24.91 percent return.
The biggest market story of the fourth quarter, of course, was the change of
fortune that buffeted emerging markets. Emerging markets -- which are
concentrated primarily in Asia -- experienced major market downturns. The MSCI
EM Index posted a loss of 19.18 percent for the fourth quarter of 1997; it was
down by 13.45 percent for the year.
Good News in the Fixed Income Market
An excellent year for bonds rounded out a strong year for domestic markets
overall. Bonds performed particularly well in the latter part of 1997, as
rising bond prices drove the yield on the 30-year Treasury bond to 5.92 percent
on Dec. 31, 1997 -- its lowest point since January 1996. Investors turned to
bonds to avoid what they judged to be an overvalued stock market and to profit
from a possible drop in interest rates. In addition, with the United States
looking at a possible budget surplus in 1998, investors acted to take advantage
of a potentially more limited bond supply. The strong dollar encouraged foreign
investors to purchase U. S. bonds, which also fueled bonds' upward surge.
Summary
The strong year in large-cap domestic companies continued to produce healthy
equity markets in the United States. Growth oriented mutual funds benefited
accordingly. Likewise, fixed income funds benefited from the U.S. bond market's
strong showing. The small-cap equity market had a harder time this year as
investor favor trended toward large-cap growth companies, which tend to have
more stable earnings. International markets -- particularly Asia -- struggled
amidst the currency crisis that struck in the latter part of the year. Money
market fund yields reflected a steady year in money markets as interest rates
remained fairly stable.
Going Forward
The last several years have been a great golden era for the United States. The
strong economy of the past few years provided an environment in which U. S.
investors had the ability to achieve record gains. While disruptions and
dislocations in Southeast Asia may have some overlapping effects on the United
States, we are hopeful that the impacts on our economy, and the profits of U.S.
corporations as a whole, will not be major. What's more, we anticipate any ill
effects on other developed Western economies to be somewhat mild over the next
several quarters. As a result, we hope for a continued strong U.S. economy, and
a favorable investment environment, in coming months.
The Basics
Although no one can predict what might happen to the markets in the future, we
believe investors must understand the factors that move the markets, not just
to profit from them, but to gain the patience to ride out short-term
volatility. As always, no matter what direction you think the economy is
heading, it's important to remember the basics. Think long term and re-evaluate
your investment portfolio from time to time to make sure it continues to match
your goals, risk tolerance and time horizon.
Sincerely,
/s/ Richard R. Christensen
Richard R. Christensen
President
Jan. 25, 1998
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TABLE OF CONTENTS
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Liberty Variable Investment Trust
Portfolio Managers' Discussions:
Colonial Growth and Income Fund, Variable Series ................ 1
Stein Roe Global Utilities Fund, Variable Series ................ 3
Colonial International Fund for Growth, Variable Series ......... 5
Colonial Strategic Income Fund, Variable Series ................. 7
Colonial U.S. Stock Fund, Variable Series ....................... 9
Newport Tiger Fund, Variable Series ............................. 11
Liberty All-Star Equity Fund, Variable Series ................... 13
Report of Independent Accountants ............................... 14
Financial Statements:
Colonial Growth and Income Fund, Variable Series ................ 15
Stein Roe Global Utilities Fund, Variable Series ................ 21
Colonial International Fund for Growth, Variable Series ......... 26
Colonial Strategic Income Fund, Variable Series ................. 33
Colonial U.S. Stock Fund, Variable Series ....................... 40
Newport Tiger Fund, Variable Series ............................. 46
Liberty All-Star Equity Fund, Variable Series ................... 51
Notes to Financial Statements .................................... 57
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PORTFOLIO MANAGERS' DISCUSSION
Liberty Variable Investment Trust Colonial Growth and Income Fund, Variable
Series
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Dear Contract Owner:
Colonial Growth and Income Fund, Variable Series seeks primarily income
and long-term capital growth and, secondarily, preservation of capital.
Fund Performance (as of December 31, 1997)
Inception Date ................................ 7/1/93
Assuming reinvestment of all distributions
12-month total return ...................... 28.97%
Net asset value per share on 12/31/96 ......... $13.96
Net asset value per share on 12/31/97 ......... $15.34
Portfolio Managers' Discussion
John Lennon and Gordon Johnson are portfolio co-managers for Colonial
Growth and Income Fund, Variable Series, and vice presidents of Colonial
Management Associates, Inc.
What was the investment environment for stocks during the year?
Over the past 12 months, there have been strong gains in almost all types
of equities, marked by pockets of volatility in March, August and October.
Throughout the year there were definite changes in the sectors that were
performing well. During the first half of the year, large capitalization
stocks, such as those in the Standard & Poor's 500 (S&P 500) Index, were
strong. In the second half of the period, middle capitalization stocks as
represented by the S&P Mid-Cap Index, outperformed large caps. Growth and value
stocks also performed differently during the year. Growth stocks outperformed
over the first six months, followed by a second half in which value stocks led
the way. Despite these variations, over the year as a whole, mid-cap and
large-cap stocks offered about the same returns, while growth stocks
outperformed value stocks.
What is your current investment strategy?
By expanding our definition of value investing, our current strategy
allows us to more broadly diversify the portfolio. This New ValueTM perspective
focuses on a stock's value relative to others in its industry, rather than on
an absolute measure of value. Our equity holdings fall into three categories:
stocks that offer value; defensive stocks, which are more resilient in down
markets; and stocks that offer growth at a reasonable price.
What is your market outlook for the Fund?
Despite the recent volatility in the stock markets, both here and abroad,
the U.S. economy remains sound, which bodes well for domestic stocks. The
Fund's well diversified portfolio should continue to benefit the Fund in the
future.
1
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PORTFOLIO MANAGERS' DISCUSSION
Liberty Variable Investment Trust Colonial Growth and Income Fund, Variable
Series
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[LINE CHART]
Colonial Growth & Income Fund, Variable Series vs. S&P 500 Index
Change in value of $10,000 from 7/1/93-12/31/97
Average Annual Total Returns on December 31, 1997
Since Inception 12 Months
17.40 28.97%
Colonial Growth & Income
Fund, Variable Series S&P 500 Index
- --------------------- -------------
7/1/93 10000 10000
10070 9960
10530 10337
10560 10258
10680 10470
10410 10370
12/31/93 10501.1 10495
10855.9 10852
10703.8 10557
10338.9 10098
10420 10227
10338.9 10394
6/30/94 10115.9 10140
10399.7 10473
10784.9 10901
10582.2 10635
10572 10873
10217.3 10478
12/31/94 10421.8 10633
10536.1 10909
10941.3 11333
11180.3 11667
11460.8 12010
11793.3 12490
6/30/95 12115.5 12779
12458.3 13203
12645.4 13236
12874 13794
12884.4 13745
13476.6 14348
12/31/95 13551.2 14624
14078.2 15121
14239.5 15262
14228.7 15409
14476.1 15636
14747.6 16038
6/30/96 14715.3 16099
14026.3 15389
14467.7 15714
14952.1 16597
15275 17055
15974.8 18343
12/31/96 15976.1 17979
16502.5 19102
16685.6 19252
15907.4 18463
16616.9 19564
17681.2 20760
6/30/97 18539.5 21683
19558 23408
19135 22097
20027 23307
19432 22529
19947 23571
12/31/97 20604 23976
Past performance is no guarantee of future results. Performance numbers reflect
all Fund net expenses, but do not include insurance charges imposed by your
insurance company's separate accounts or certain expenses reimbursed by the
Manager. If performance information included the effect of these additional
amounts, returns would be lower. The Standard & Poor's 500 Index is an unmanaged
index that tracks the performance of a selection of widely held common stocks.
Indexes are not investments, do not incur fees or expenses and are not
professionally managed.
2
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PORTFOLIO MANAGERS' DISCUSSION
Liberty Variable Investment Trust Stein Roe Global Utilities Fund, Variable
Series
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Dear Contract Owner:
Stein Roe Global Utilities Fund, Variable Series seeks current income and
long-term growth of capital and income.
Fund Performance (as of December 31, 1997)
Inception Date ................................ 7/1/93
Assuming reinvestment of all distributions
12-month total return ...................... 28.75%
Net asset value per share on 12/31/96 ......... $10.70
Net asset value per share on 12/31/97 ......... $11.92
Portfolio Managers' Discussion
Ophelia Barsketis and Deborah Jansen are portfolio
co-managers of Stein Roe Global Utilities Fund, Variable Series.
What was the environment like in 1997?
Low inflation, low or falling interest rates in many areas of the world
and good economic growth, particularly in the U.S., Europe and Latin America,
combined to provide a favorable environment during most of the period. In the
U.S., those utility companies that cut costs and restructured their operations
to increase their competitiveness in advance of deregulation performed well. A
number of European utility stocks benefited from improving economic growth and
efforts to privatize many state-owned utilities. Latin American utilities,
which sought to fulfill pent up demand for basic electric and telephone
services also performed well.
However, during the last several months of the year, a currency crisis in
Southeast Asia had a negative spillover effect on markets world-wide and
volatility increased. This event did not cause us to alter our investment
strategy--we maintained our conservative focus on a diversified group of
well-managed utility companies with good growth prospects in a variety of
countries. We believe that these market events may present the Fund with buying
opportunities over the near term and we will look closely at stocks in areas
where economic growth and market prospects appear favorable.
What impact did the sectors have on performance during the period?
The portfolio is divided among the three major utility sectors:
electricity, telecommunications and gas/water. During the period, the
telecommunications sector offered the best value, often at the expense of the
electric sector, particularly in the U.S., where future deregulation and
increased competition limited upside potential. The portfolio benefited from
individual stock selection within the telecommunications sector.
What is your outlook for the year ahead?
The utility supply and demand balance in many emerging nations is so tight
that any event that limits a utility's ability to service its customers has a
broad impact. Many utility services that we take for granted, such as running
water, private telephones and electricity, are less reliable in these countries
and utilities that are able to efficiently service this pent up demand should
do well.
Elsewhere in the world, privatization and deregulation present utility
companies with new opportunities. We have already found value in the
independent power producer (IPP) sector of the electricity sector. As utility
companies worldwide are unable to generate sufficient electricity to keep pace
with growth in electric transmission needs, IPPs are able to fill this gap by
providing an independent source of electricity. The portfolio has owned IPPs,
and has avoided large exposure to traditional domestic electric utility stocks,
which we believe have less attractive earnings growth potential.
3
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PORTFOLIO MANAGERS' DISCUSSION
Liberty Variable Investment Trust Stein Roe Global Utilities Fund, Variable
Series
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[LINE CHART]
Stein Roe Global Utilities Fund, Variable Series vs. MSCI World ND Index
and S&P Utilities Index
Change in value of $10,000 from 7/1/93-12/31/97
Average Annual Total Returns on December 31, 1997
Since Inception 12 Months
11.53% 28.75%
Stein Roe Global
Utilities Fund,
Variable Series S&P Utilities MSCI World ND
--------------- ------------- -------------
7/31/93 10000 10000 10000
10110 10232 10203
10350 10727 10669
10260 10700 10469
10120 10681 10755
9670 10143 10144
12/31/93 9830 10090 10638
9667 10156 11337
9219 9582 11188
8954 9257 10703
9148 9489 11031
8761 9232 11057
6/30/94 8577 9255 11024
8883 9566 11231
8913 9536 11567
8699 9299 11260
8812 9371 11578
8771 9237 11073
12/31/94 8820 9289 11178
9353 10012 11007
9418 9993 11165
9364 9930 11701
9560 10301 12106
9995 10622 12207
6/30/95 10060 10667 12200
10136 10941 12808
10376 11164 12520
10930 11864 12882
11180 12116 12676
11387 12248 13113
12/31/95 11921 13109 13494
12148 13281 13735
11864 12761 13816
11751 12486 14043
11660 12635 14371
11682 12606 14380
6/30/96 12125 13115 14450
11682 12266 13936
11739 12552 14094
11785 12673 14642
12239 13303 14742
12625 13601 15565
12/31/96 12699 13518 15313
12984 13585 15494
13150 13471 15670
12699 13063 15357
12794 12843 15856
13233 13416 16832
6/30/97 13625 13830 17668
13850 14132 18479
13542 13896 17240
14183 14494 18174
14373 14620 17214
15619 15674 17516
12/31/97 16350 16851 17727
Past performance is no guarantee of future results. Performance numbers reflect
all Fund net expenses, but do not include insurance charges imposed by your
insurance company's separate accounts or certain expenses reimbursed by the
Manager. If performance information included the effect of these additional
amounts, returns would be lower. The Morgan Stanley Capital International World
Index ND is an unmanaged index that tracks the performance of global stocks. The
Standard & Poor's Utilities Index is an unmanaged index that tracks the
performance of domestic utility stocks. Indexes are not investments, do not
incur fees or expenses and are not professionally managed.
4
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PORTFOLIO MANAGERS' DISCUSSION
Liberty Variable Investment Trust Colonial International Fund for Growth,
Variable Series
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Dear Contract Owner:
Colonial International Fund for Growth, Variable Series seeks long-term
capital growth, by investing primarily in non-U.S. equity securities. The Fund
is non-diversified and may invest more than 5% of its total assets in the
securities of a single issuer, thereby increasing the risk of loss compared to
a diversified fund.
Fund Performance (as of December 31, 1997)
Inception Date ................................ 5/2/94
Assuming reinvestment of all distributions
12-month total return ...................... (3.27)%
Net asset value per share on 12/31/96 ......... $1.96
Net asset value per share on 12/31/97 ......... $1.78
Portfolio Manager's Discussion
David Harris is portfolio manager of Colonial International Fund for
Growth, Variable Series and vice president of Stein Roe & Farnham Incorporated.
He is also an investment management principal with Stein Roe Global Capital
Management, a division of Stein Roe & Farnham Incorporated.
What was your investment strategy like during the last 12 months?
We remained committed to our value-oriented investment strategy. We
continued to favor smaller companies that are not closely followed by the
equity analyst community and that may be overlooked by many investors. These
stocks have a tendency to be underpriced relative to their operating and/or
financial strength.
In the past, Southeast Asia was a source of attractively priced stocks
with long-term growth potential and strong financial and operating
characteristics. Earlier in the year as valuations became less compelling, we
reduced our positions in Southeast Asia. In our opinion, heightened investor
enthusiasm caused many of these stocks to shift from under- to over-valued.
However, as the Southeast Asian currency crisis emerged during the last part of
the period, dramatic reductions in share prices have made many of these stocks
attractive once again, despite near-term economic uncertainty.
The Fund's strategy is to diversify across countries and industries to
reduce risk and invest in rapidly growing economies. The Fund's Asian exposure
has aided returns in the past because of the previous high economic growth in
the region. We believe that in the long term, Asia could recover and the
current slowdown is reflected in share prices. We also believe that small- and
middle-capitalization companies could continue to offer good investment
opportunities.
What is your market outlook?
Our strategy focuses on buying shares of smaller, lesser known companies
with good long-term growth potential. We have a strong understanding of their
businesses and we purchase these companies at a price that suggests that
management can create shareholder value. Although we remain confident in the
long-term value of this strategy, it hampered the Fund's performance during the
past year.
5
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PORTFOLIO MANAGERS' DISCUSSION
Liberty Variable Investment Trust Colonial International Fund for Growth,
Variable Series
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[LINE CHART]
Colonial International Fund for Growth, Variable Series vs. Morgan Stanley
Capital International EAFE Index
Change in value of $10,000 from 5/2/94-12/31/97
Average Annual Total Returns on December 31, 1997
Since Inception 12 Months
0.45% (3.27)%
Colonial International Fund
For Growth, Variable Series MSCI EAFE
--------------------------- ---------
5/2/94 10000 10000
9900 9771
6/30/94 9700 9766
9950 9993
10250 10162
9950 9805
10000 10103
9550 9653
12/31/94 9400 9726
8850 9477
8700 9466
8850 9895
9100 10337
9100 10237
6/30/95 9050 10123
9550 10785
9550 10334
9700 10457
9550 10154
9700 10368
12/31/95 9950 10811
9899.49 10949
9899.49 10981
10102 11127
10657.1 11473
10556.1 11304
6/30/96 10607 11393
10203 11066
10354.1 11059
10455.1 11364
10203 11239
10607 11719
12/31/96 10509 11636
10562.3 11417
10670 11496
10670 11715
10616 11687
11420.2 12296
6/30/97 12010 13028
12064 13315
11226 12359
11655 13153
10635 12181
10313 12131
12/31/97 10165 12307
Past performance is n o guarantee of future results. Performance numbers reflect
all Fund net expenses, but do not include insurance charges imposed by your
insurance company's separate accounts or certain expenses reimbursed by the
Manager. If performance information included the effect of these additional
amounts, returns would be lower. The Morgan Stanley Capital International EAFE
ND Index is a widely recognized index that tracks the performance of
international stocks by market capitalization. Indexes are not inves tments, do
not incur fees or expenses and are not professionally managed.
6
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PORTFOLIO MANAGERS' DISCUSSION
Liberty Variable Investment Trust Colonial Strategic Income Fund,
Variable Series
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Dear Contract Owner:
Colonial Strategic Income Fund, Variable Series seeks a high level of
current income, as is consistent with prudent risk and maximizing total return,
by diversifying investments primarily in U.S. and foreign government and high
yield, high risk corporate debt securities. The Fund may invest a substantial
portion of its assets in high yield, high risk bonds (commonly referred to as
"junk bonds") and therefore may not be suitable for all investors. Purchasers
should carefully assess the risks associated with an investment in the Fund.
Fund Performance (as of December 31, 1997)
<TABLE>
<S> <C>
Inception Date ................................ 7/5/94
Assuming reinvestment of all distributions
12-month total return ...................... 9.11%
Net asset value per share on 12/31/96 ......... $11.04
Net asset value per share on 12/31/97 ......... $11.15
</TABLE>
Portfolio Manager's Discussion
Carl Ericson is portfolio manager of Colonial Strategic Income Fund,
Variable Series. Mr. Ericson is a senior vice president of Colonial Management
Associates, Inc. and director of the Taxable Fixed Income Department.
What was the Fund's investment strategy in 1997?
High Yield Corporate Bonds
During the past 12 months, high yield corporate bonds benefited from the
stable economy and performed extremely well. Issuing companies were able to
refinance at relatively low interest rates. The market drew its strength from
the resulting cash flow and liquidity of these companies. Credit quality among
high yield bonds remains solid with default rates at historic lows of less than
2%.
International Arena
In the international arena, the Fund invested primarily in European bonds.
However, the return on some of these--and other foreign government bonds--fell
below the return of U.S. Treasurys. Because we believed that investors were no
longer adequately compensated for some overseas investments, we eliminated
positions in South Africa and Italy and reduced holdings in other foreign
government markets.
U.S. Treasury Market
Uncertainty in the world's markets, particularly in Asia, resulted in an
increased demand for the security of the U.S. Treasury market. This trend has
driven Treasury prices up and pushed yields down. The Fund's management also
turned to U.S. Treasurys in the face of concern about the future pace of
economic activity.
What is your market outlook?
Our outlook for the coming year is positive. A modest interest rate
decline coupled with slowing growth in the economy should be favorable. We
remain committed to investing at least 20%, but not more than 50%, in each of
the three bond sectors--U.S. Treasurys, high yield bonds and international
bonds. These ranges allow us to seek out the best performing bonds, while
maintaining diversification. As the markets move, we assess the benefits and
risks and shift assets to the fixed income sector we believe has the most
promising combination of total return, yield and risk.
7
<PAGE>
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PORTFOLIO MANAGERS' DISCUSSION
Liberty Variable Investment Trust Colonial Strategic Income Fund, Variable
Series
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[LINE CHART]
Colonial Strategic Income Fund, Variable Series vs. Lehman Brothers
Government/Corporate Bond Index
Change in value of $10,000 from 7/31/94-12/31/97
Average Annual Total Returns on December 31, 1997
Since Inception 12 Months
9.11% 10.84%
Colonial Growth & Income
Fund, Variable Series S&P 500 Index
--------------------- -------------
7/31/94 10000 10000
10049.6 10004
9/30/94 10009.9 9853
10049.6 9842
9940.48 9824
12/31/94 10029.4 9889
10162.6 10079
10408.5 10312
3/31/95 10592.9 10382
10787.5 10526
11084.6 10968
6/30/95 11135.9 11055
11238.3 11013
11238.3 11154
9/30/95 11432.9 11267
11586.6 11432
11699.3 11620
12/31/95 11864.9 11792
12037.6 11865
11940.4 11613
3/31/96 11886.5 11516
11940.4 11437
11951.2 11418
6/30/96 12026.8 11570
12124 11597
12264.3 11568
9/30/96 12512.6 11774
12707 12049
13009.3 12271
12/31/96 13030.8 12134
12995.4 12148
13089.9 12174
3/31/97 12901 12029
13066.3 12205
13278.7 12319
6/30/97 13467.6 12467
13786 12848
13692 12704
9/30/97 13987 12904
14011 13111
14081 13180
12/31/97 14218 13318
Past performance is no guarantee of future results. The Lehman Brothers
Government/Corporate Bond Index is an unmanaged index that tracks the
performance of a selection of U.S. government agency, Treasury and
investment-grade corporate bonds. Indexes are not investments, do not incur fees
or expenses and it is not possible to invest in an index. Performance numbers
reflect all Fund net expenses, but do not include insurance charges imposed by
your insurance company's separate accounts or certain expenses reimbursed by the
Manager. If performance information included the effect of these additional
amounts, returns would be lower.
8
<PAGE>
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PORTFOLIO MANAGERS' DISCUSSION
Liberty Variable Investment Trust Colonial U.S. Stock Fund, Variable Series
- --------------------------------------------------------------------------------
Dear Contract Owner:
Colonial U.S. Stock Fund, Variable Series seeks long-term capital growth
by investing primarily in large capitalization equity securities.
Fund Performance (as of December 31, 1997)
Inception Date ................................ 7/5/94
Assuming reinvestment of all distributions
12-month total return ...................... 32.23%
Net asset value per share on 12/31/96 ......... $14.22
Net asset value per share on 12/31/97 ......... $16.29
Portfolio Manager's Discussion
Mark Stoeckle is portfolio manager of Colonial U.S. Stock Fund, Variable
Series. Mr. Stoeckle is a vice president of Colonial Management Associates,
Inc.
What was the investment environment like in 1997?
The first half of the period was very strong for large company stocks.
However, the Asian currency crisis had a negative effect on the U.S. markets
during the second half of the period. On two consecutive days the Dow Jones
Industrial Average posted its largest single-day point decline in history,
followed by its largest single-day point gain. By the end of the period, large
company stocks regained most of their losses, illustrating their dominance over
smaller company stocks which continued to lag.
What was your investment strategy in 1997?
We focused on high quality, large-cap stocks with good long-term growth
potential. Large companies continued to make productivity gains while focusing
on their core capabilities. Many companies are strategically better run today
than ever in their histories. We believe that these factors should have a
favorable effect on earnings growth in the future.
What sectors had an impact on Fund performance?
Early in the period, we believed several technology stocks had become
overpriced and no longer offered attractive values. We sold several of our
technology stocks and invested the proceeds in financial service stocks that
offered greater potential for earnings growth. Shareholders benefited from this
strategic shift as technology stocks lost ground during the second half of the
period and financial institutions' outperformed the market.
What is your market outlook?
The events of the past six months have left investors wondering what lies
ahead for the financial markets. The currency and financial crises in Asia
continue to play out and while we think that earnings growth may be affected,
it is too early to predict the extent of the impact. A number of factors have
led us to believe there is still room for large company stocks to generate
attractive earnings growth, although at a slower pace than over the last three
years. The economy is still growing, inflation is low and companies continue to
utilize technology to improve productivity and cut costs. However, we think
that stock selection will become more important in 1998 as a "rising tide" may
not continue to carry all stocks along with it. We believe we have a superior
approach to stock selection, as reflected by our core investment strategy and
are confident in our ability to continue to find attractively valued, high
quality stocks.
9
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PORTFOLIO MANAGERS' DISCUSSION
Liberty Variable Investment Trust Colonial U.S. Stock Fund, Variable Series
- --------------------------------------------------------------------------------
[LINE CHART]
Colonial U.S. Stock Fund, Variable Series vs. S&P 500 Index
Change in value of $10,000 from 7/1/94-12/31/97
Average Annual Total Returns on December 31, 1997
Since Inception 12 Months
25.00% 32.23%
Colonial U.S. Stock
Fund, Variable Series S&P 500 Index
--------------------- -------------
7/31/94 10000 10000
10399.6 10409
10194.9 10155
10360.6 10383
9990.25 10005
12/31/94 10175 10153
10433 10416
10848.7 10822
11136 11140
11363.9 11468
11770.1 11926
6/30/95 12027.7 12202
12443.8 12607
12394.2 12638
12810.3 13171
12760.8 13124
13246.3 13700
12/31/95 13196.7 13964
13549.1 14439
13816 14573
13890.7 14713
14403.2 14930
14744.9 15314
6/30/96 14424.6 15373
13730.6 14694
14189.7 15004
14883.7 15848
15257.4 16285
16346.4 17515
12/31/96 16078.8 17168
17254.8 18240
17243 18383
16553.7 17629
17435.7 18681
18430.7 19823
6/30/97 19131.8 20704
20658 22351
19946 21100
20975 22255
20014 21512
20828 22507
12/31/97 21261 22893
Past performance is no guarantee of future results. Performance numbers reflect
all Fund net expenses, but do not include insurance charges imposed by your
insurance company's separate accounts or certain expenses reimbursed by the
Manager. If performance information included the effect of these additional
amounts, returns would be lower. The Standard & Poor's 500 Index is an unmanaged
index that tracks the performance of a selection of widely held common stocks.
Indexes are not investments, do not incur fees or expenses and are not
professionally managed.
10
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PORTFOLIO MANAGERS' DISCUSSION
Liberty Variable Investment Trust Newport Tiger Fund, Variable Series
- --------------------------------------------------------------------------------
Dear Contract Owner:
Newport Tiger Fund, Variable Series seeks long-term capital growth by
investing primarily in equity securities of companies located in the nine
Tigers of Asia (Hong Kong, Singapore, South Korea, Taiwan, Malaysia, Thailand,
Indonesia, China and the Philippines).
Fund Performance (as of December 31, 1997)
Inception Date ................................ 5/1/95
Assuming reinvestment of all distributions
12-month total return ...................... (31.14)%
Net asset value per share on 12/31/96 ......... $2.52
Net asset value per share on 12/31/97 ......... $1.71
Portfolio Managers' Discussion
Jack Mussey is president and chief executive officer of Newport Fund
Management, Inc. and portfolio co-manager of Newport Tiger Fund, Variable
Series. Tim Tuttle is managing director of Newport Fund Management and
portfolio co-manager of Newport Tiger Fund, Variable Series. While the Tiger
markets are subject to risks not associated with more developed countries, the
Fund's management team has more than 20 years of investment experience in the
region.
What was the Fund's strategy during the year?
Our top-down investment approach, whereby we first select the high quality
countries followed by the high quality companies within those countries, has
served the portfolio well. We began the period with a sizable investment in
Hong Kong and Singapore. Both markets contain quality growth companies with
strong balance sheets--the kind of companies we favor. However, as the Thai
currency crisis emerged and unmasked a precarious banking system, we suspected
its potential spread to other markets and we shifted additional assets into
Hong Kong and Singapore.
We reduced the number of stocks in the portfolio. These stocks represent
companies that we believe are among the best managed, best capitalized growth
businesses in Asia. In particular, we believe the utility sector has strong
growth potential. In Hong Kong, utilities enjoy a favorable regulatory
environment, as well as steady demand that we expect will increase as
residential building activity increases.
What is your market outlook?
The magnitude of the Asian market and currency declines of 1997 indicate
serious financial problems, but we believe that this crisis should pass.
However, we are not comfortable predicting a quick turnaround in the seriously
weak economies of Thailand, Indonesia and South Korea. We question their
governments' will to take painful steps of economic restructuring that may
result in political or social unrest. On the other hand, we believe currencies
should stabilize as imports stagnate and exports grow. This could attract
foreign capital to help recapitalize the banking and industrial sectors of
these economies.
We also believe that Hong Kong should benefit from its association with
China. China's huge economy is rich in terms of foreign reserves, high savings
and significant export activity. More importantly, we believe China has both
the political capability and the will to stimulate its economy. We expect lower
interest rates, more accessible credit and improved liquidity. In addition,
strong, ongoing productivity gains have made Chinese exports very competitive
with those of other nations. We anticipate that many Hong Kong companies will
experience increased business and asset flows from China's growing economy.
In keeping with our quality philosophy, we intend to continue to emphasize
Hong Kong and Singapore in the portfolio. Weakness in these two markets over
the past six months can be largely attributed to a spillover of shaken investor
trust in the region. We believe that Hong Kong will continue to defend its
currency and that weakness resulting from market speculators will be dealt with
swiftly by the Hong Kong Currency Board. Over the long term, we believe that
Hong Kong will benefit from its commitment to its currency, a growing property
development sector and its close connection with China.
We believe that the Tiger markets will once again generate attractive
returns over the longer term and we appreciate your patience and long-term
support.
11
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PORTFOLIO MANAGERS' DISCUSSION
Liberty Variable Investment Trust Newport Tiger Fund, Variable Series
- --------------------------------------------------------------------------------
[LINE CHART]
Newport Tiger Fund, Variable Series vs. Morgan Stanley Capital
International EAFE GDP
Change in value of $10,000 from 5/1/95-12/31/97
Average Annual Total Returns on December 31, 1997
Since Inception 12 Months
(4.47)% (31.14)%
Newport Tiger Fund,
Variable Series MSCI EAFE GDP
--------------- -------------
5/1/95 10000 10000
11100 9903.33
6/30/95 10900 9792.82
11200 10432.9
10850 9997.2
9/30/95 11050 10115.8
11000 9822.6
11050 10029.6
12/31/95 11500.4 10458.8
12660.6 10591.7
12559.7 10623.3
3/31/96 12559.7 10764.1
12509.3 11099.3
12458.8 10935.4
6/30/96 12206.6 11021.2
11550.9 10704.8
11954.4 10698.9
9/30/96 12307 10993.1
12206.6 10872.8
12811.9 11337.3
12/31/96 12849.7 11256.6
12747.7 11045
12747.7 11121
3/31/97 11982.9 11333.3
11778.9 11305.5
12850 11895
6/30/97 13462 12603
13666 12881
11321 11956
9/30/97 11678 12724
9026 11784
8873 11736
12/31/97 8848 11906
Past performance is no guarantee of future results. Performance numbers reflect
all Fund net expenses, but do not include insurance charges imposed by your
insurance company's separate accounts or certain expenses reimbursed by the
Manager. If performance information included the effect of these additional
amounts, returns would be lower. The Morgan Stanley Capital International
Europe, Australia and Far East (MSCI EAFE) GDP Index is a broad based, unmanaged
index that tracks the performance of foreign stocks. Indexes are not
investments, do not incur fees or expenses and are not professionally managed.
12
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PORTFOLIO MANAGERS' DISCUSSION
Liberty Variable Investment Trust Liberty All-Star Equity Fund, Variable Series
- --------------------------------------------------------------------------------
Dear Contract Owner:
Liberty All-Star Equity Fund, Variable Series seeks total investment
return, comprised of long-term capital appreciation and current income, through
investment primarily in a diversified portfolio of equity securities.
Fund Performance (as of December 31, 1997)
Inception Date ................................. 11/17/97
Assuming reinvestment of all distributions total
return ...................................... 0.80%
Net asset value per share on 12/31/97 .......... $10.07
Manager's Discussion
Liberty Asset Management Company ("LAMCO") is the manager of the Fund. No
one individual at LAMCO is responsible for LAMCO's investment management of the
Fund.
What is your investment strategy?
The Fund's investment program is based upon LAMCO's multi-manager concept.
LAMCO allocates the Fund's portfolio assets on an approximately equal basis
among a number of independent investment management organization's ("Portfolio
Managers")--currently five in number--each of which employs a different
investment style, and from time to time rebalances the portfolio among the
Portfolio Managers so as to maintain an approximately equal allocation of the
portfolio among them throughout all market cycles.
In LAMCO's opinion, the multi-manager concept provides advantages over the
use of a single manager because of the following primary factors:
(i) Most equity investment management firms consistently employ a distinct
investment "style" which causes them to emphasize stocks with particular
characteristics;
(ii) because of changing investor preferences, any given investment style
will move into and out of market favor and will result in better investment
performance under certain market conditions but less successful performance
under other conditions;
(iii) Consequently, by allocating the Fund's portfolio on an approximately
equal basis among Portfolio Managers employing different styles, the impact of
any one such style on investment performance will be diluted, and he
investment performance of the total portfolio will be more consistent and less
volatile over the long term than if a single style were employed throughout the
entire period; and
(iv) more consistent performance at a given annual rate of return over
time produces a higher rate of return for the long term than more volatile
performance having the same average annual rate of return.
LAMCO, based on the foregoing principles and on its analysis and
evaluation of information regarding the personnel and investment styles and
performance of a universe of several hundred professional investment management
firms, has selected for appointment by the Fund a group of Portfolio Managers
representing a blending of different styles which, in its opinion, is
appropriate to the Fund's investment objective.
LAMCO continuously monitors the performance and investment styles of the
Fund's Portfolio Managers and from time to time may recommend changes of
Portfolio Managers based on factors such as changes in a Portfolio Manager's
investment style or departure by a Portfolio Manager from the investment style
for which it had been selected, a deterioration in a Portfolio Manager's
performance relative to that of other investment management firms practicing a
similar style, or adverse changes in its ownership or personnel.
The Fund's current Portfolio Managers are:
J.P. Morgan Investment Management Inc.
Oppenheimer Capital
Palley-Needelman Asset Management, Inc.
Westwood Management Corp.
Wilke/Thompson Capital Management, Inc.
What is your market outlook?
LAMCO and the Portfolio Managers generally believe that a continuation of
current favorable conditions for the domestic equities markets is possible,
even likely, with the turmoil in Asia being the most obvious "wild card" in
1998. More important, especially to variable annuity investors seeking to
accumulate retirement funds over a period of years, is the long-term outlook
for equities. And we continue to believe that a style-diversified portfolio of
quality equity securities is the best core holding for the long term.
13
<PAGE>
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REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Trustees of
Liberty Variable Investment Trust
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of each of the seven
series constituting Liberty Variable Investment Trust (the "Trust"), formerly
Keyport Variable Investment Trust, at December 31, 1997, the results of their
operations, the changes in their net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and the financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Trust's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1997 by correspondence with the
custodian and brokers, and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
February 13, 1998
14
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- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
Liberty Variable Investment Trust Colonial Growth and Income Fund, Variable
Series / December 31, 1997
- --------------------------------------------------------------------------------
Country
Abbrev. Shares Value
--------- -------- ---------------
COMMON STOCKS--88.6%
Construction--3.1%
Building Construction
Centex Corp. ................... 24,600 $ 1,548,262
Hollandsche Beton Groep
N.V. (a) .................... Ne 68,500 1,274,340
Koninklijke Volker Wessels
Stevin N.V. ................. Ne 12,000 373,057
Lennar Corp. ................... 5,300 114,281
------------
3,309,940
------------
Finance, Insurance & Real Estate--19.9%
Depository Institutions--7.9%
Astoria Financial Corp. ........ 31,000 1,728,250
Bank of Montreal ............... Ca 17,300 766,643
Commerce Bancshares, Inc. ...... 1,433 97,086
Den Danske Bank ................ De 3,000 399,860
First Empire State Corp. ....... 300 140,400
Greenpoint Financial Corp. ..... 42,500 3,083,906
Jyske Bank ..................... De 3,000 365,699
National Australia Bank Ltd. Au 38,800 541,296
Toronto Dominion Bank .......... Ca 34,100 1,285,712
-----------
8,408,852
------------
Insurance Carriers--8.8%
Allstate Corp. ................. 13,100 1,190,462
American Bankers Insurance
Group, Inc. ................. 50,400 2,315,250
CMAC Investment Corp. .......... 5,000 301,875
Cigna Corp. .................... 6,400 1,107,600
Mercury General Corp. .......... 23,600 1,303,900
Old Republic International
Corp. ....................... 25,400 944,562
Orion Capital Corp. ............ 2,500 116,563
Sunamerica, Inc. ............... 21,600 923,400
Travelers Group, Inc. .......... 21,750 1,171,781
------------
9,375,393
------------
Nondepository Credit Institution--0.2%
Money Store, Inc. (The) ........ 10,600 222,600
------------
Real Estate--0.1%
LNR Property Corp. ............. 5,300 125,212
------------
Security Brokers & Dealers--2.9%
A.G. Edwards, Inc. ............. 51,300 2,039,175
Merrill Lynch & Co., Inc. ...... 15,000 1,094,062
------------
3,133,237
------------
Manufacturing--40.0%
Apparel--0.1%
Gamma Holding N.V. ............. Ne 3,000 152,480
-----------
Chemicals & Allied Products--8.5%
Akzo Nobel N.V. ADR ............ Ne 14,074 1,222,679
Bristol-Myers Squibb Co. ....... 22,800 2,157,450
Dow Chemical Co. ............... 15,700 1,593,550
Country
Abbrev. Shares Value
--------- -------- ---------------
Ecolab, Inc. ................... 6,000 $ 332,625
International Specialty
Products, Inc. (a) .......... 15,000 224,062
Johnson & Johnson .............. 22,800 1,501,950
Merck & Co., Inc. .............. 16,200 1,721,250
Norsk Hydro A.S. ADR ........... No 7,100 362,100
-----------
9,115,666
------------
Communications Equipment--0.1%
Ericsson Spa ................... It 3,000 131,289
-----------
Electronic Components--0.6%
SCI Systems, Inc. (a) .......... 14,600 636,013
------------
Fabricated Metal--1.6%
Danaher Corp. .................. 4,000 253,750
Harsco Corp. ................... 35,000 1,509,375
------------
1,763,125
------------
Food & Kindred Products--0.1%
Lancaster Colony Corp. ......... 2,000 112,750
------------
Furniture & Fixtures--0.9%
Herman Miller, Inc. ............ 12,000 655,500
Johnson Controls, Inc. ......... 6,000 286,500
------------
942,000
------------
Machinery & Computer Equipment--9.1%
Caterpillar, Inc. .............. 18,200 883,837
Compaq Computer Corp. .......... 31,200 1,760,850
Cummins Engine Co., Inc. ....... 27,500 1,624,219
EMC Corp. (a) .................. 20,000 548,750
Silicon Graphics, Inc. (a) ..... 10,000 124,375
Storage Technology Corp. (a) 9,000 557,438
Sun Microsystems, Inc. (a) ..... 72,800 2,902,900
Timken Co. ..................... 30,000 1,031,250
Tyco International Ltd. ........ 5,800 261,363
------------
9,694,982
------------
Measuring & Analyzing Instruments--0.9%
Raytheon Co., Class A .......... 529 26,101
Raytheon Co., Class B .......... 4,600 232,300
Tektronix, Inc. ................ 17,500 694,531
------------
952,932
------------
Miscellaneous Manufacturing--1.4%
Callaway Golf Co. .............. 36,200 1,033,962
Hasbro, Inc. ................... 16,000 504,000
------------
1,537,962
------------
Petroleum Refining--5.9%
Amerada Hess Corp. ............. 17,600 965,800
Exxon Corp. .................... 8,800 538,450
Mobil Corp. .................... 13,000 938,438
Murphy Oil Corp. ............... 5,000 270,938
Phillips Petroleum Co. ......... 34,100 1,658,113
Sun Co., Inc. .................. 18,000 757,125
USX-Marathon Group ............. 35,800 1,208,250
------------
6,337,114
------------
See Notes to Investment Portfolio.
15
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SCHEDULE OF INVESTMENTS (Continued)
Liberty Variable Investment Trust Colonial Growth and Income Fund, Variable
Series / December 31, 1997
- --------------------------------------------------------------------------------
Country
Abbrev. Shares Value
--------- -------- ---------------
Primary Metal--0.7%
Asarco, Inc. ........................... 29,700 $ 666,394
Bethlehem Steel Corp. (a) .............. 12,000 103,500
------------
769,894
------------
Primary Smelting--1.0%
Phelps Dodge Corp. ..................... 17,400 1,083,150
------------
Printing & Publishing--0.6%
Moore Corp. Ltd. ....................... 8,200 124,025
Wallace Computer Services,
Inc. ................................ 12,000 466,500
------------
590,525
------------
Rubber & Plastic--1.1%
Goodyear Tire & Rubber Co. 6,000 381,750
Hanna (M.A.) Co. ....................... 7,000 176,750
Illinois Tool Works, Inc. .............. 10,000 601,250
------------
1,159,750
------------
Tobacco Products--0.8%
Gallaher Group PLC ADR ................. UK 41,100 878,512
------------
Transportation Equipment--6.6%
Eaton Corp. ............................ 13,000 1,160,250
Equipements et Composants
pour l'Industrie
Automobile .......................... Fr 2,050 411,804
Fleetwood Enterprises, Inc. ............ 13,900 589,881
Ford Motor Co. ......................... 15,500 754,656
General Dynamics Corp. ................. 12,200 1,054,537
General Motors Corp. ................... 8,300 503,187
Harley-Davidson, Inc. .................. 12,000 328,500
Textron, Inc. .......................... 27,000 1,687,500
Thiokol Corp. .......................... 6,500 528,125
------------
7,018,440
------------
Mining & Energy--0.3%
Metal Mining
Cleveland-Cliffs, Inc. ................. 6,700 306,944
------------
Retail Trade--5.9%
Apparel & Accessory Stores--0.2%
Koninklijke Bijenkorf Beheer Ne 3,000 188,009
Macintosh N.V. ......................... Ne 3,000 65,137
------------
253,146
------------
Food Stores--1.6%
Kroger Corp. (a) ....................... 12,500 461,719
Vendex International N.V. .............. Ne 22,700 1,253,457
------------
1,715,176
------------
General Merchandise Stores--0.4%
Family Dollar Stores, Inc. ............. 16,000 469,000
------------
Home Furnishings & Equipment--0.5%
CompUSA, Inc. .......................... 16,500 511,500
------------
Country
Abbrev. Shares Value
--------- -------- ---------------
Miscellaneous Retail--3.2%
Office Depot, Inc. (a) ................. 45,000 $ 1,077,188
OfficeMax, Inc. (a) .................... 20,000 285,000
Rite Aid Corp. ......................... 9,000 527,625
U.S. Office Products Co. (a) ........... 37,500 726,563
Walgreen Co. ........................... 24,400 765,550
------------
3,381,926
------------
Services--9.6%
Business Services--1.5%
Omnicom Group, Inc. .................... 38,800 1,644,150
------------
Computer Related Services--2.0%
BMC Software, Inc. (a) ................. 9,000 590,625
Cadence Design Systems,
Inc. (a) ............................ 33,300 815,850
HBO & Co. .............................. 14,400 690,300
------------
2,096,775
------------
Engineering, Accounting, Research &
Management--1.1%
Corrections Corp. of
America (a) ......................... 15,600 583,050
International-Muller N.V. .............. Ne 18,400 579,284
------------
1,162,334
------------
Health Services--5.0%
Lincare Holdings, Inc. (a) ............. 9,300 530,100
Tenet Healthcare Corp. (a) ............. 54,700 1,811,938
Universal Health Services,
Inc., Class B (a) ................... 58,500 2,946,938
------------
5,288,976
------------
Transportation, Communication, Electric,
Gas & Sanitary Services--8.2%
Air Transportation--1.4%
Continental Airlines,
Class B (a) ......................... 15,000 721,875
U.S. Airways Group, Inc. (a) 12,700 793,750
------------
1,515,625
------------
Communications--2.4%
Ameritech Corp. ........................ 19,700 1,585,850
Bell Atlantic Corp. .................... 5,000 454,375
BellSouth Corp. ........................ 9,000 506,812
------------
2,547,037
------------
Electric, Gas & Sanitary Services--1.2%
Enova Corp. ............................ 13,500 365,344
Gas y Electricidad SA .................. Sp 4,550 328,358
TransCanada Pipelines .................. 26,300 588,463
------------
1,282,165
------------
Electric Services--1.5%
Boston Edison Co. ...................... 19,000 719,625
DTE Energy Co. ......................... 3,100 107,531
NIPSCO Industries, Inc. ................ 16,400 810,775
------------
1,637,931
------------
See Notes to Investment Portfolio.
16
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- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Liberty Variable Investment Trust Colonial Growth and Income Fund, Variable
Series / December 31, 1997
- --------------------------------------------------------------------------------
Country
Abbrev. Shares Value
--------- -------- ---------------
Motor Freight & Warehousing--0.8%
CNF Transportation .................. 21,000 $ 803,250
------------
Sanitary Services--0.7%
Severn Trent Water PLC .............. UK 23,750 382,905
United Utilities PLC ................ UK 25,100 322,743
------------
705,648
------------
Water Transportation--0.2%
Tidewater, Inc. ..................... 4,000 220,500
------------
Wholesale Trade--1.6%
Durable Goods--1.5%
Arrow Electronics, Inc. (a) ......... 27,000 875,812
Beers N.V. .......................... Ne 7,235 246,343
CHS Electronics, Inc. (a) ........... 13,000 222,625
Marshall Industries (a) ............. 10,300 309,000
------------
1,653,780
------------
Nondurable Goods--0.1%
Universal Corp. Holding Co. 1,700 69,913
------------
Total Common Stocks
(cost of $67,792,278) ............................. 94,717,594
------------
Par
----------
U.S. GOVERNMENT & AGENCY OBLIGATIONS--6.9%
U.S. Government Agencies--5.1%
Federal Home Loan Mortgage
Corp., 6.500% 01/01/26 ......... $1,625,792 1,606,982
---------
Federal National Mortgage
Association:
6.000% 12/01/08 .................. 1,708,462 1,681,229
6.500% 12/01/23 .................. 2,263,483 2,235,190
-
3,916,419
---------
Par Value
------------- ---------------
U.S. Government Obligations--1.8%
U.S. Treasury Notes, 7.875%
04/15/98 ............................. $1,895,000 $ 1,907,734
------------
Total U.S. Government & Agency
Obligations
(cost of $7,478,843) .............................. 7,431,135
------------
TOTAL INVESTMENTS--95.5%
(cost of $75,271,121) (b) ......................... 102,148,729
------------
SHORT-TERM OBLIGATIONS--7.4%
Repurchase agreement with ABN
AMRO Chicago Corp., dated
12/31/97, due 01/02/98 at
6.600%, collateralized by U.S.
Treasury notes with various
maturities to 2016, market
value $8,078,132 (repurchase
proceeds $7,898,895) ................. 7,896,000 7,896,000
------------
Other Assets & Liabilities, Net--(2.9)% (3,135,387)
------------
Net Assets--100.0% ................................. $106,909,342
============
Notes to Investment Portfolio:
(a) Non-income producing.
(b) The cost for federal income tax purposes is identical. Gross unrealized
appreciation and depreciation at December 31, 1997 is as follows:
Gross unrealized appreciation $ 28,426,329
Gross unrealized depreciation (1,548,721)
------------
Net unrealized appreciation $ 26,877,608
============
Summary of Securities by Country
% of Total
Country Securities
Summary of Securities by Country Abbrev. Value at Value
- ---------------------------------- --------- -------------- -----------
United States ........... $ 90,617,022 88.7%
Netherlands ............. Ne 5,354,786 5.2
Canada .................. Ca 2,052,355 2.0
United Kingdom .......... UK 1,584,160 1.6
Denmark ................. De 765,559 0.8
Australia ............... Au 541,296 0.5
France .................. Fr 411,804 0.4
Norway .................. No 362,100 0.4
Spain ................... Sp 328,358 0.3
Italy ................... It 131,289 0.1
------------ -----
$102,148,729 100.0%
============ =====
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
Acronym Name
--------- ----------------------------
ADR American Depositary Receipt
See Notes to Financial Statements.
17
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Liberty Variable Investment Trust Colonial Growth and Income Fund, Variable
Series / December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $75,271,121)....................... $102,148,729
Short-term obligations .......................................................... 7,896,000
Cash (including foreign currencies) ............................................. 13,098
Dividends, tax reclaims and interest receivable ................................. 170,748
Receivable for fund shares sold ................................................. 71,203
Unamortized organization expenses ............................................... 2,663
Other assets .................................................................... 10,321
------------
Total assets .................................................................. 110,312,762
------------
Liabilities:
Payable for investments purchased ............................................... 2,360,210
Payable for fund shares repurchased ............................................. 957,396
Management fee payable .......................................................... 57,721
Bookkeeping fee payable ......................................................... 3,845
Transfer agent fee payable ...................................................... 625
Accrued expenses payable ........................................................ 23,623
------------
Total liabilities ............................................................. 3,403,420
------------
Net assets ...................................................................... $106,909,342
============
Net assets represented by:
Paid-in capital ................................................................ $ 80,070,546
Accumulated overdistributed net investment income .............................. (31,448)
Accumulated net realized gains on investments and foreign currency transactions 39,795
Net unrealized appreciation on investments and foreign currency transactions ... 26,830,449
------------
Total net assets applicable to shares of beneficial interest outstanding ........ $106,909,342
============
Shares of beneficial interest outstanding ....................................... 6,969,039
============
Net asset value per share ....................................................... $15.34
======
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Dividends (net of nonrebatable foreign taxes withheld at source of $47,378) $ 1,484,827
Interest income ........................................................... 903,088
-----------
Total investment income ................................................. 2,387,915
-----------
Expenses:
Management fee ........................................................... 605,151
Bookkeeping fee .......................................................... 43,653
Transfer agent fee ....................................................... 7,500
Audit fee ................................................................ 17,580
Printing expense ......................................................... 12,624
Trustees' expense ........................................................ 9,240
Custodian fee ............................................................ 16,313
Legal fee ................................................................ 12,285
Amortization of organization expense ..................................... 5,369
Miscellaneous expense .................................................... 4,823
-----------
Total expenses .......................................................... 734,538
-----------
Net investment income ..................................................... 1,653,377
Realized and unrealized gains (losses) on investments and foreign currency
transactions:
Net realized gains on investments ........................................ 14,229,486
Net realized losses on foreign currency transactions ..................... (5,695)
Unrealized appreciation on investments and foreign currency transactions . 7,164,338
-----------
Net increase in net assets resulting from operations ...................... $23,041,506
===========
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Liberty Variable Investment Trust Colonial Growth and Income Fund, Variable
Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, December 31,
1997 1996
---------------- ---------------
<S> <C> <C>
Operations:
Net investment income .......................................................... $ 1,653,377 $ 1,667,134
Net realized gains on investments .............................................. 14,229,486 3,883,301
Net realized gains (losses) on foreign currency transactions ................... (5,695) 10,848
Unrealized appreciation on investments and foreign currency transactions ....... 7,164,338 8,029,922
------------- ------------
Net increase in net assets resulting from operations ........................... 23,041,506 13,591,205
------------- ------------
Distributions declared from:
Net investment income .......................................................... (1,645,577) (1,744,707)
In excess of net investment income ............................................. (30,753) --
Net realized gains ............................................................. (14,188,931) (3,888,095)
------------- ------------
Total distributions ............................................................ (15,865,261) (5,632,802)
------------- ------------
Fund share transactions:
Proceeds from fund shares sold ................................................. 30,092,306 18,289,038
Cost of fund shares repurchased ................................................ (39,471,310) (9,703,359)
Distributions reinvested ....................................................... 15,865,261 5,632,802
------------- ------------
Net increase in net assets resulting from fund share transactions ............... 6,486,257 14,218,481
------------- ------------
Total increase in net assets .................................................... 13,662,502 22,176,884
Net assets:
Beginning of period ............................................................ 93,246,840 71,069,956
------------- ------------
End of period .................................................................. $ 106,909,342 $ 93,246,840
============= ============
Accumulated undistributed (overdistributed) net investment income included in
ending net assets .............................................................. $ (31,448) $ 11,633
============= ============
Analysis of changes in shares of beneficial interest:
Shares sold .................................................................... 1,875,504 1,353,533
Shares redeemed ................................................................ (2,624,840) (716,029)
Distributions reinvested ....................................................... 1,039,663 402,075
------------- ------------
Net increase .................................................................... 290,327 1,039,579
============= ============
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Liberty Variable Investment Trust Colonial Growth and Income Fund, Variable
Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------
1997 1996
---------------- ----------------
<S> <C> <C>
Per share operating performance:
Net asset value, beginning of period .................... $ 13.96 $ 12.60
--------- -------
Net investment income (a) ............................... 0.28 0.28
Net realized and unrealized gains (losses) on
investments and foreign currency transactions .......... 3.75 1.98
--------- -------
Total from investment operations ........................ 4.03 2.26
--------- -------
Less distributions from:
Dividends from net investment income ................... (0.27) (0.28)
In excess of net investment income ..................... (0.01) --
Dividends from net realized gains ...................... 2.37) (0.62)
--------- -------
Total distributions ..................................... (2.65) (0.90)
--------- -------
Net asset value, end of period .......................... $ 15.34 $ 13.96
========= =======
Total return:
Total investment return (b) ............................ 28.97% 17.89%
Ratios/supplemental data:
Net assets, end of period (000) ......................... $106,909 $93,247
Ratio of net expenses to average net assets ............. 0.79%(e) 0.79%(e)
Ratio of net investment income to average net assets..... 1.77%(e) 2.02%(e)
Portfolio turnover ratio ................................ 60% 24%
Average commission rate (f) ............................. $ 0.0401 $0.0383
<CAPTION>
Year Ended December 31,
-------------------------------------------------
1995 1994 1993***
---------------- ----------- --------------------
<S> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period .................... $ 10.03 $ 10.36 $ 10.00
-------- ------- -------
Net investment income (a) ............................... 0.29 0.26 0.09
Net realized and unrealized gains (losses) on
investments and foreign currency transactions .......... 2.72 ( 0.34) 0.41
-------- ------- -------
Total from investment operations ........................ 3.01 (0.08) 0.50
-------- ------- -------
Less distributions from:
Dividends from net investment income ................... (0.25) (0.25) (0.11)
In excess of net investment income ..................... -- -- --
Dividends from net realized gains ...................... (0.19) -- (0.03)
-------- ------- -------
Total distributions ..................................... (0.44) (0.25) (0.14)
-------- ------- -------
Net asset value, end of period .......................... $ 12.60 $ 10.03 $ 10.36
======== ======= =======
Total return:
Total investment return (b) ............................ 30.03% (0.76)% 5.01%**(c)
Ratios/supplemental data:
Net assets, end of period (000) ......................... $71,070 $48,052 $29,298
Ratio of net expenses to average net assets ............. 0.81%(e) 0.87% 1.00%*(d)
Ratio of net investment income to average net assets..... 2.51%(e) 2.82% 2.32%*(c)
Portfolio turnover ratio ................................ 79% 55% 8%**
Average commission rate (f) ............................. -- -- --
</TABLE>
* Annualized
** Not Annualized.
*** For the period from the commencement of operations July 1, 1993 to
December 31, 1993.
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Computed giving effect to Manager's expense limitation undertaking.
(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, this ratio would have been 1.23%
(annualized) for the period ended December 31, 1993.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
(f) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged.
Federal Income Tax footnote (unaudited)
94.77% of the gain distribution recorded in December 1997 and paid in January
1998 was derived from long term gains.
See Notes to Financial Statements.
20
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
Liberty Variable Investment Trust Stein Roe Global Utilities Fund, Variable
Series / December 31, 1997
- --------------------------------------------------------------------------------
Country
Abbrev. Shares Value
--------- ------------- --------------
COMMON STOCKS--91.1%
Construction--2.2%
Heavy Construction--Non-Building
Compagnie Generale des
Eaux ............................. Fr 8,600 $ 1,199,303
-----------
Manufacturing--12.7%
Communications Equipment--3.9%
Lucent Technologies, Inc. ........... 15,000 1,198,125
Nokia Corp., ADR .................... Fi 13,400 938,000
-----------
2,136,125
-----------
Electronic & Electrical Equipment--1.3%
Tellabs, Inc. (a) ................... 13,500 713,812
-----------
Machinery & Computer Equipment--2.0%
Culligan Water
Technologies (a) ................. 21,500 1,080,375
-----------
Petroleum Refining--1.6%
YPF Sociedad Anonima ADR Ar 26,000 888,875
-----------
Primary Smelting--2.1%
National Power PLC ADR .............. UK 29,400 1,164,975
-----------
Tobacco Products--1.8%
Grupo Carso SA de CV,
Series A1 (a) .................... Mx 142,000 950,186
-----------
Transportation, Communication, Electric,
Gas & Sanitary Services--74.3%
Communications--20.4%
Airtouch Communications,
Inc. (a) ......................... 25,300 1,051,531
Ameritech Corp. ..................... 15,000 1,207,500
GTE Corp. ........................... 21,000 1,097,250
Portugal Telecom SA ADR ............. Pt 22,900 1,076,300
SBC Communications, Inc. ............ 14,600 1,069,450
Telecom Italia (Saving
Shares) .......................... It 243,000 1,067,723
Telecomunicacoes Brasileiras
SA ............................... Br 7,600 884,925
Telefonica de Argentina SA
ADR .............................. Ar 12,700 473,075
Telefonica de Espana ADR ............ Sp 10,100 919,731
Telefonos de Mexico SA
ADS .............................. Mx 22,000 1,233,375
WorldCom, Inc. (a) .................. 34,700 1,049,675
-----------
11,130,535
-----------
Electric, Gas & Sanitary Services--2.1%
AES Corp. (a) ....................... 23,900 1,114,338
-----------
Electric Services--29.4%
Chilgener S.A. ADR .................. Ch 34,500 845,250
Country
Abbrev. Shares Value
--------- ------------- --------------
Cia Energetica de Minas
Gerais ........................... Br 19,700,000 $ 855,923
CMS Energy Corp. .................... 26,200 1,154,437
Edison International ................ 36,800 1,000,500
Electric De Portugal ADR (a) Pt 12,500 484,375
FPL Group, Inc. ..................... 19,500 1,154,156
Hong Kong Electric
Holdings Ltd., ADR ............... HK 278,500 1,058,601
Iberdrola SA ........................ Sp 75,700 995,758
Light Servicos de
Eletricidade ..................... Br 2,500,000 1,041,575
NIPSCO Industries, Inc. ............. 24,600 1,216,163
New Century Energies, Inc. .......... 28,500 1,366,219
Pinnacle West Capital Corp. ......... 27,000 1,144,125
Scottish Power PLC ADR .............. UK 30,000 1,065,000
Sierra Pacific Resources ............ 15,000 562,500
Southern Co. ........................ 34,000 879,750
Texas Utilities Co. ................. 30,000 1,246,875
-----------
16,071,207
-----------
Gas Services--10.0%
Columbia Gas System ................. 13,000 1,021,313
MCN Energy Group, Inc. .............. 27,400 1,106,275
Questar Corp. ....................... 25,600 1,142,400
UGI Corp. ........................... 38,500 1,128,531
Williams Companies, Inc. ............ 37,600 1,066,900
-----------
5,465,419
-----------
Sanitary Services--4.6%
American Water Works, Inc. 34,500 942,281
Companhia de Saneamento
Basico do Estado de Sao
Paulo ............................ Br 2,400,000 569,867
USA Waste Services, Inc. (a)......... 25,700 1,008,725
-----------
2,520,873
-----------
Telecommunications--5.9%
AT&T Corp. .......................... 17,400 1,065,750
Groupo Iusacell SA ADR (a)........... Mx 46,000 991,875
Nortel Inversora SA (a) ............. Ar 18,600 1,179,938
-----------
3,237,563
-----------
Transportation Services--1.9%
VIAG AG ............................. G 1,900 1,023,686
-----------
Wholesale Trade--1.9%
Nondurable Goods
VEBA AG ............................. G 15,600 1,062,552
-----------
Total Common Stocks
(cost of $43,191,446) ....................................... 49,759,824
-----------
See Notes to Investment Portfolio.
21
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Liberty Variable Investment Trust Stein Roe Global Utilities Fund, Variable
Series / December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Country
Abbrev. Shares Value
--------- ------------- ---------------
<S> <C> <C> <C>
PREFERRED STOCKS-- 5.1%
Transportation, Communication, Electric, Gas &
Sanitary Services--5.1%
Communications--1.8%
Ericsson LM, 4.250% ................. Sw 189,500 $ 994,875
---------
Electric Services--2.3%
Commonwealth Edison Co.,
7.240% ........................... 5,500 550,000
TU Electric Capital, 8.250% ......... 28,000 724,500
-----------
1,274,500
-----------
Gas Services--1.0%
Enron Capital LLC, 8.000% ........... 20,000 502,500
-----------
Total Preferred Stocks
(cost of $2,712,377)....................................... 2,771,875
-----------
Total Investments--96.2%
(cost of $45,903,823) (b)............................... .. 52,531,699
-----------
Par
-------
SHORT-TERM OBLIGATIONS--5.5%
Repurchase agreement with ABN AMRO
Chicago Corp., dated 12/31/97, due
01/02/98 at 6.600%, collateralized by U.S.
Treasury notes with various maturities to
1999, market value $3,082,131 (repurchase
proceeds $3,015,105)................ $3,014,000 3,014,000
-----------
Other Assets & Liabilities, Net--(1.7)% ............. (942,686)
-----------
Net Assets--100% .................................... $54,603,013
===========
</TABLE>
Notes to Investment Portfolio:
(a) Non-income producing.
(b) The cost for federal income tax purposes is $45,906,166. Gross unrealized
appreciation and depreciation at December 31, 1997 is as follows:
Gross unrealized appreciation $6,882,184
Gross unrealized depreciation (256,651)
----------
Net unrealized appreciation $6,625,533
==========
As of December 31, 1997, the Fund had entered into the following forward
currency contracts:
Net Unrealized
Contracts In Exchange Settlement Appreciation
to Deliver For Date (U.S.$)
- ---------------- ------------------ ------------ ---------------
US $1,048,961 It 1,856,451,255 01/09/98 $363
Summary of Securities by Country
% of Total
Country Securities
Summary of Securities by Country Abbrev. Value at Value
- ---------------------------------- --------- -------------- -----------
United States ........... $29,565,956 56.3%
Brazil .................. Br 3,352,290 6.4
Mexico .................. Mx 3,175,436 6.1
Argentina ............... Ar 2,541,888 4.8
United Kingdom .......... UK 2,229,975 4.2
Germany ................. G 2,086,238 4.0
Spain ................... Sp 1,915,489 3.6
Portugal ................ Pt 1,560,675 3.0
France .................. Fr 1,199,303 2.3
Italy ................... It 1,067,723 2.0
Hong Kong ............... HK 1,058,601 2.0
Sweden .................. Sw 994,875 1.9
Finland ................. Fi 938,000 1.8
Chile ................... Ch 845,250 1.6
----------- -----
$52,531,699 100.0%
=========== =====
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
Acronym Name
- --------- ----------------------------
ADR American Depositary Receipt
ADS American Depositary Shares
See Notes to Financial Statements.
22
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Liberty Variable Investment Trust Stein Roe Global Utilities Fund, Variable
Series / December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $45,903,823) ...................... $52,531,699
Short-term obligations .......................................................... 3,014,000
Cash ............................................................................ 2,456,620
Receivable for investments sold ................................................. 3,119,315
Receivable for fund shares sold ................................................. 59,008
Dividends, tax reclaims and interest receivable ................................. 133,006
Unamortized organization expenses ............................................... 2,733
Other assets .................................................................... 5,293
-----------
Total assets .................................................................. 61,321,674
-----------
Liabilities:
Payable for investments purchased ............................................... 6,575,741
Payable for fund shares repurchased ............................................. 89,942
Management fee payable .......................................................... 28,933
Bookkeeping fee payable ......................................................... 2,321
Transfer agent fee payable ...................................................... 625
Accrued expenses payable ........................................................ 21,099
-----------
Total liabilities ............................................................. 6,718,661
-----------
Net assets ...................................................................... $54,603,013
===========
Net assets represented by:
Paid-in capital ................................................................ $47,497,615
Accumulated overdistributed net investment income .............................. (47,338)
Accumulated net realized gains on investments and foreign currency transactions 524,356
Net unrealized appreciation on investments and foreign currency transactions ... 6,628,380
-----------
Total net assets applicable to shares of beneficial interest outstanding ........ $54,603,013
===========
Shares of beneficial interest outstanding ....................................... 4,580,010
===========
Net asset value per share ....................................................... $11.92
======
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Dividends ................................................................ $ 2,116,930
Interest income .......................................................... 171,730
-----------
Total investment income ................................................ 2,288,660
-----------
Expenses:
Management fee .......................................................... 310,458
Bookkeeping fee ......................................................... 27,071
Transfer agent fee ...................................................... 7,500
Audit fee ............................................................... 17,773
Printing expense ........................................................ 7,226
Trustees' fees .......................................................... 5,538
Custodian fee ........................................................... 3,502
Legal fee ............................................................... 7,368
Amortization of organization expense .................................... 5,511
Miscellaneous expense ................................................... 2,285
-----------
Total expenses ......................................................... 394,232
-----------
Net investment income .................................................... 1,894,428
Realized and unrealized gains (losses) on investments and foreign
currency transactions:
Net realized gains on investments ....................................... 10,703,205
Net realized losses on foreign currency transactions .................... (42,539)
Unrealized depreciation on investments and foreign currency transactions (100,383)
-----------
Net increase in net assets resulting from operations ..................... $12,454,711
===========
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Liberty Variable Investment Trust Stein Roe Global Utilities Fund, Variable
Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, December 31,
1997 1996
---------------- ---------------
<S> <C> <C>
Operations:
Net investment income ........................................................ $ 1,894,428 $ 2,111,597
Net realized gains (losses) on investments ................................... 10,703,205 (45,156)
Net realized losses on foreign currency transactions ......................... (42,539) --
Unrealized appreciation (depreciation) on investments and foreign currency
transactions ................................................................ (100,383) 871,144
------------- -------------
Net increase in net assets resulting from operations ......................... 12,454,711 2,937,585
------------- -------------
Distributions declared from:
Net investment income ........................................................ (1,882,751) (2,098,660)
Net realized gains ........................................................... (5,469,889) --
------------- -------------
Total distributions ........................................................... (7,352,640) (2,098,660)
------------- -------------
Fund share transactions:
Proceeds from fund shares sold ............................................... 6,189,301 5,054,022
Cost of fund shares repurchased .............................................. (11,947,796) (11,681,570)
Distributions reinvested ..................................................... 7,352,640 2,098,660
------------- -------------
Net increase (decrease) in net assets resulting from fund share transactions .. 1,594,145 (4,528,888)
------------- -------------
Total increase (decrease) in net assets ....................................... 6,696,216 (3,689,963)
Net assets:
Beginning of period .......................................................... 47,906,797 51,596,760
------------- -------------
End of period ................................................................ $ 54,603,013 $ 47,906,797
============= =============
Accumulated overdistributed net investment income included in ending net assets $ (47,338) $ (16,477)
============= =============
Analysis of changes in shares of beneficial interest:
Shares sold .................................................................. 528,994 478,345
Shares redeemed .............................................................. (1,042,449) (1,111,326)
Distributions reinvested ..................................................... 617,350 194,321
------------- -------------
Net increase (decrease) ....................................................... 103,895 (438,660)
============= =============
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Liberty Variable Investment Trust Stein Roe Global Utilities Fund, Variable
Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------
1997 1996
---------------- ----------------
<S> <C> <C>
Per share operating performance:
Net asset value, beginning of period ................... $ 10.70 $ 10.50
------- -------
Net investment income (a) .............................. 0.46 0.46
Net realized and unrealized gains (losses) on
investments and foreign currency transactions ......... 2.62 0.23
------- -------
Total from investment operations ....................... 3.08 0.69
------- -------
Less distributions from:
Dividends from net investment income .................. (0.48) (0.49)
Dividends from net realized gains ..................... (1.38) --
--------- ---------
Total distributions .................................... (1.86) (0.49)
--------- ---------
Net asset value, end of period ......................... $ 11.92 $ 10.70
========= =========
Total return:
Total investment return (b) ........................... 28.75% 6.53%
Ratios/supplemental data:
Net assets, end of period (000) ........................ $54,603 $47,907
Ratio of net expenses to average net assets ............ 0.83%(e) 0.81%(e)
Ratio of net investment income to average net assets 3.96%(e) 4.36%(e)
Portfolio turnover ratio ............................... 89% 14%
Average commission rate (f) ............................ $0.0041 $0.0468
<CAPTION>
Year Ended December 31,
-----------------------------------------------------
1995 1994 1993***
---------------- ------------- ----------------------
<S> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period ................... $ 8.11 $ 9.65 $ 10.00
-------- ------- --------
Net investment income (a) .............................. 0.46 0.54 0.18
Net realized and unrealized gains (losses) on
investments and foreign currency transactions ......... 2.39 (1.53) (0.35)
-------- ------- --------
Total from investment operations ....................... 2.85 (0.99) (0.17)
-------- ------- --------
Less distributions from:
Dividends from net investment income .................. (0.46) (0.55) (0.18)
Dividends from net realized gains ..................... -- -- --
-------- ------- --------
Total distributions .................................... (0.46) (0.55) (0.18)
-------- ------- --------
Net asset value, end of period ......................... $ 10.50 $ 8.11 $ 9.65
======== ======= ========
Total return:
Total investment return (b) ........................... 35.15% (10.27)% (1.70)%**(c)
Ratios/supplemental data:
Net assets, end of period (000) ........................ $51,597 $38,156 $54,441
Ratio of net expenses to average net assets ............ 0.83%(e) 0.86% 1.00%* (d)
Ratio of net investment income to average net assets 4.98%(e) 5.80% 5.10%* (c)
Portfolio turnover ratio ............................... 18% 16% 2%**
Average commission rate (f) ............................ -- -- --
</TABLE>
* Annualized
** Not Annualized
*** For the period from the commencement of operations July 1, 1993 to
December 31, 1993.
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Computed giving effect to Manager's expense limitation undertaking.
(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, this ratio would have been 1.09%
(annualized) for the period ended December 31, 1993.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
(f) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged.
Federal Income Tax footnote (unaudited)
100% of the gain distribution recorded in December 1997 and paid in January
1998 was derived from long term gains.
See Notes to Financial Statements.
25
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
Liberty Variable Investment Trust Colonial International Fund for Growth,
Variable Series / December 31, 1997
- --------------------------------------------------------------------------------
Country
Abbrev. Shares Value
--------- --------- ------------
COMMON STOCKS--80.2%
Agriculture, Forestry & Fishing--0.0%
Agricultural Services
PT Chareon Pokphand
Indonesia .......................... In 162,500 $ 8,784
-----------
Construction--1.7%
Building Construction--0.0%
Property Perfect Public Co.,
Ltd. (a) ........................... Th 128,000 3,190
Sino Thai Engineering &
Construction Public Co.,
Ltd. (a) ........................... Th 28,600 3,564
-----------
6,754
-----------
Non-Building Construction--1.7%
Compagnie Generale des
Eaux ............................... Fr 3,396 473,585
Kaneshita Construction ................ Ja 13,000 58,749
-----------
532,334
-----------
Finance, Insurance & Real Estate--20.2%
Depository Institutions--11.6%
Banco Latinoamericano de
Exportaciones SA ................... Pt 10,000 413,750
Banco Popolare di Milano .............. It 71,800 449,705
Banque Nationale de Paris
(a) ................................ Fr 12,200 647,926
Deutsche Bank AG (a) .................. G 8,500 600,222
Generale Banque ....................... Be 1,155 502,072
Generale Banque VVPR
STRIP (a) .......................... Be 105 28
HSBC Holdings PLC ..................... HK 10,000 246,522
Merita Ltd., Class A (a) .............. Fi 116,000 634,543
Siam Commercial Bank .................. Th 48,000 54,829
-----------
3,549,597
-----------
Financial Services--0.2%
Industrial Finance Corp. of
Thailand ........................... Th 140,700 21,624
PT Putra Surya
Multidana (a) ...................... In 420,000 39,730
-----------
61,354
-----------
Holding Companies--1.9%
Fortis Amev NV ........................ Ne 13,302 580,260
-----------
Insurance Carriers--1.0%
Reinsurance Australia Corp. Au 120,189 312,972
-----------
Investment Companies--1.6%
Fleming Russia Securities
Fund (a) ........................... Ru 8,300 166,000
Japan OTC Equity Fund,
Inc. (a) ........................... Ja 170 51,000
Country
Abbrev. Shares Value
--------- ------- ------------
World Equity Benchmark
Share--Japan ....................... Ja 27,000 $ 266,760
----------
483,760
----------
Nondepository Credit Institution--1.4%
Promise Co., Ltd. ..................... Ja 7,800 432,553
----------
Real Estate--2.0%
Diligentia AB (a) ..................... Sw 35,100 468,938
IOI Properties Berhad ................. Ma 62,000 19,632
PT Kawasan Industri
Jababeka ........................... In 300,000 110,811
----------
599,381
----------
Security Brokers & Dealers--0.5%
Kokusai Securities Co., Ltd. Ja 24,000 167,286
----------
Manufacturing--33.4%
Apparel--0.6%
Tokyo Style ........................... Ja 21,000 189,805
----------
Chemicals & Allied Products--7.7%
Henkel KGAA ........................... G 1,067 59,920
Henkel KGAA Preferred
Shares ............................. G 7,733 488,015
Indian Petrochemicals
Corp., Ltd. GDR .................... In 15,800 80,975
Kemira Oy ............................. Fi 25,600 237,311
Norsk Hydro AS ........................ No 9,200 449,207
Novartis .............................. Sz 230 372,845
PT Evershine Textile
Industry ........................... In 427,396 34,654
Reliance Industries Ltd. GDR In 12,000 103,200
SmithKline Beecham PLC ................ UK 51,426 528,153
Yukong Ltd. GDR (a) ................... Ko 2,900 3,074
----------
2,357,354
----------
Communications Equipment--2.0%
Koor Industries Ltd. ADR .............. Is 8,200 179,887
Matsushaita Electric
Industrial Co. ..................... Ja 29,000 424,266
----------
604,153
----------
Electronic Components--2.8%
Alcatel Alsthom ....................... Fr 3,755 476,895
Murata Manufacturing Co.,
Ltd. ............................... Ja 12,000 304,240
Samsung Electronics GDS
(a) ................................ Ko 397 5,556
Samsung Electronics Old
Preferred GDS ...................... Ko 10,064 56,610
Samsung Electronics
Preferred .......................... Ko 400 2,737
Samsung Electronics Co. ............... Ko 6 136
-----------
846,174
-----------
See Notes to Investment Portfolio.
26
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Liberty Variable Investment Trust Colonial International Fund for Growth,
Variable Series / December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Country
Abbrev. Shares Value
------- --------------- -----------
<S> <C> <C> <C>
Fabricated Metal--1.1%
Friedrich Grohe AG ..................... G 1,400 $ 339,394
-----------
Food & Kindred Products--0.5%
Perdigao S.A.X. (a) .................... Br 70,000,000 91,573
Vitasoy International
Holdings Ltd. ....................... HK 133,000 56,219
-----------
147,792
-----------
Household Appliances--0.8%
Moulinex (a) ........................... Fr 10,400 256,741
-----------
Machinery & Computer Equipment--6.7%
AGIV-AG fuer Industrie
und Verkehrswesen ................... G 16,300 308,146
Bucher Holding ......................... Sz 284 246,703
Canon, Inc. ............................ Ja 18,000 419,134
Hitachi Ltd. ........................... Ja 42,000 299,184
Mannesmann AG .......................... G 1,070 540,801
Mori Seiki ............................. Ja 22,000 227,490
-----------
2,041,458
-----------
Paper Products--3.0%
Enso Oy, Series R ...................... Fi 49,500 384,355
Metro Pacific Corp. .................... Ph 1,992,340 55,097
Metsa-Serla Oy, B Shares ............... Fi 61,600 480,570
-----------
920,022
-----------
Petroleum Refining--5.1%
Compagnie Francaise de
Petroleum Total B Shares Fr 5,389 586,004
Neste Oy ............................... Fi 13,100 317,418
YPF Sociedad Anonima
ADR ................................. Ar 16,500 564,094
Yukong Ltd. ............................ Ko 10,800 86,018
-----------
1,553,534
-----------
Primary Metals--2.6%
Avesta Sheffield AB (a) ................ Sw 48,800 322,910
Ssab Svenskt AB, Series B .............. Sw 23,000 379,753
TransTec PLC ........................... UK 74,222 102,778
-----------
805,441
-----------
Stone, Clay, Glass & Concrete--0.5%
Companion Building
Materials, Ltd. ..................... HK 1,911,840 55,768
N.V. Koninklijke Sphinx
Gustavsberg ......................... Ne 11,546 112,241
-----------
168,009
-----------
Textile Mill Products--0.0%
Empresa Nacional de
Credito (a)(b) ...................... Br 350,000 (c)
-------------
Mining & Energy--2.3%
Coal Mining--0.2%
Samchully Co. .......................... Ko 4,773 64,203
-------------
</TABLE>
Country
Abbrev. Shares Value
-------- ------ ------------
Crude Petroleum & Natural Gas--1.3%
Saga Petroleum A.S. .................... No 23,100 $ 397,898
-----------
Metal Mining--0.4%
Billiton PLC (a) ....................... UK 54,000 138,870
-----------
Miscellaneous Metals--0.4%
Southern Peru Copper Co................. Pe 8,100 108,337
-----------
Retail Trade--4.4%
Auto Dealers & Gas Stations--1.2%
Inchcape PLC ........................... UK 132,288 355,465
-----------
Food Stores--1.2%
Jusco Co. .............................. Ja 26,000 366,436
-----------
General Merchandise Stores--2.0%
Globex Utilidades SA ................... Br 15,600 90,856
Ito-Yokado Co., Ltd. ................... Ja 9,000 458,428
Matahari Putra Prima ................... In 858,000 69,567
-----------
618,851
-----------
Services--1.8%
Business Services--1.4%
Ing C. Olivetti & SPA (a) .............. It 642,880 388,482
Intrum Justitia ........................ UK 32,186 48,283
-----------
436,765
-----------
Health Services--0.4%
Biora AB ADR (a) ....................... Sw 5,500 114,125
-----------
Transportation, Communication, Electric,
Gas & Sanitary Services--13.6%
Air Transportation--1.1%
Helikopter Service A/S ................. No 26,000 317,374
-----------
Communications--8.8%
DDI Corp. .............................. Ja 58 153,269
Portugal Telecom SA ADR ................ Pt 8,000 376,000
Royal Koninklijke PTT
Nederland NV ........................ Ne 12,054 503,217
SK Telecom ............................. Ko 130 39,932
Telecom Argentina S.A.
ADR ................................. Ar 5,700 203,775
Tele-Communications
International, Inc.
Series A (a) ........................ $ 26,700 480,600
Telecom Italia ......................... It 66,275 291,207
Telecom Italia SPA ..................... It 75,000 479,753
Telecomunicacoes
Brasileiras SA ADR .................. Br 1,400 163,013
-----------
2,690,766
-----------
Gas Services--2.5%
BG PLC ................................. UK 126,176 569,923
Centrica PLC (a) ....................... UK 130,000 191,803
-----------
761,726
-----------
See Notes to Investment Portfolio.
27
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Liberty Variable Investment Trust Colonial International Fund for Growth,
Variable Series / December 31, 1997
- --------------------------------------------------------------------------------
Country
Abbrev. Shares Value
--------- -------
Water Transportation--1.2%
Danzas Holding AG ........................Sz 1,015 $199,251
Hong Kong Ferry Holdings
Co. ...................................HK 101,000 117,324
Precious Shipping Public
Co., Ltd. .............................Th 65,500 42,170
358,745
----------
Wholesale Trade--2.8%
Durable Goods
Brierley Investments Ltd. ................NZ 388,000 277,300
Celsis International PLC (a) UK 103,185 144,585
Powerscreen International
PLC ...................................UK 26,090 262,767
Yamazen Corp. (a) ........................Ja 101,000 160,913
845,565
----------
Total Common Stocks
(cost of $26,356,493).................. 24,540,038
----------
WARRANTS--0.0%
Construction--0.0%
Heavy Construction--Non-Building
Construction
Compagnie Generale des
Eaux (a) ..............................Fr 2,755 1,871
----------
Finance, Insurance & Real Estate--0.0%
Depository Institutions
Siam Commercial Bank
(a) (b) ...............................Th 12,000 (c)
----------
Total Warrants
(cost of $0) .......................... 1,871
----------
Value
--------------
Total Investments--80.2%
(cost of $26,356,493)(d) .......................... $24,541,909
-----------
Par
----------
SHORT-TERM OBLIGATIONS--16.7%
Repurchase agreement with ABN
AMRO Chicago Corp., dated
12/31/97, due 01/02/98 at 6.600%,
collateralized by U.S. Treasury
notes with various maturities to
2016, market value $5,223,777
(repurchase proceeds
$5,107,872) ......................... $5,106,000 5,106,000
-----------
Other Assets & Liabilities, Net --3.1% 951,904
-----------
Net Assets--100% ..................................... $30,599,813
===========
Notes to investment portfolio:
(a) Non-income producing.
(b) Represents fair value as determined in good faith under the direction of
the trustees.
(c) Rounds to less than one.
(d) The cost for federal income tax purposes is $26,598,160. Gross unrealized
appreciation and depreciation at December 31, 1997 is as follows:
Gross unrealized appreciation $ 4,333,544
Gross unrealized depreciation (6,389,795)
------------
Net unrealized depreciation $ (2,056,251)
============
See Notes to Investment Portfolio.
28
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Liberty Variable Investment Trust Colonial International Fund for Growth,
Variable Series / December 31, 1997
- --------------------------------------------------------------------------------
Summary of Securities by Country
% of Total
Country Securities
Summary of Securities by Country Abbrev. Value at Value
- ---------------------------------- --------- ------------- -----------
Japan ................... Ja $ 3,979,513 16.2%
France .................. Fr 2,443,022 10.0
United Kingdom .......... UK 2,342,627 9.6
Germany ................. G 2,336,498 9.5
Finland ................. Fi 2,054,197 8.4
Italy ................... It 1,609,147 6.6
Sweden .................. Sw 1,285,726 5.2
Netherlands ............. Ne 1,195,718 4.9
Norway .................. No 1,164,479 4.7
Switzerland ............. Sz 818,799 3.3
Portugal ................ Pt 789,750 3.2
Argentina ............... Ar 767,869 3.1
Belgium ................. Be 502,100 2.1
United States ........... $ 480,600 2.0
Hong Kong ............... HK 475,833 1.9
Indonesia ............... In 447,721 1.8
Brazil .................. Br 345,442 1.4
Australia ............... Au 312,972 1.3
New Zealand ............. NZ 277,300 1.1
Korea ................... Ko 258,266 1.1
Israel .................. Is 179,887 0.7
Russia .................. Ru 166,000 0.7
Thailand ................ Th 125,377 0.5
Peru .................... Pe 108,337 0.4
Philippines ............. Ph 55,097 0.2
Malaysia ................ Ma 19,632 0.1
----------- -----
$24,541,909 100.0%
=========== =====
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
Acronym Name
- --------- ------------------------------------------
ADR American Depositary Receipt
GDR Global Depositary Receipt
GDS Global Depositary Shares
STRIP Separately Traded Receipt of Interest and
Principal
See Notes to Financial Statements.
29
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Liberty Variable Investment Trust Colonial International Fund for Growth,
Variable Series / December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $26,356,493) ....................... $ 24,541,909
Short-term obligations ........................................................... 5,106,000
Cash (including foreign currencies) .............................................. 28,869
Receivable for fund shares ....................................................... 945,579
Dividends, tax reclaims and interest receivable .................................. 24,527
Unamortized organization expenses ................................................ 5,750
Other assets ..................................................................... 1,251
------------
Total assets ................................................................... 30,653,885
------------
Liabilities:
Payable for fund shares repurchased .............................................. 240
Management fee payable ........................................................... 22,115
Bookkeeping fee payable .......................................................... 2,250
Transfer agent fee payable ....................................................... 625
Accrued expenses payable ......................................................... 28,842
------------
Total liabilities .............................................................. 54,072
------------
Net assets ....................................................................... $ 30,599,813
============
Net assets represented by:
Paid-in capital ................................................................. $ 32,932,208
Accumulated overdistributed net investment income ............................... (171,584)
Accumulated net realized losses on investments and foreign currency transactions (345,186)
Net unrealized depreciation on investments and foreign currency transactions .... (1,815,625)
------------
Total net assets applicable to outstanding shares of beneficial interest ......... $ 30,599,813
============
Shares of beneficial interest outstanding ........................................ 17,225,936
============
Net asset value per share ........................................................ $1.78
=====
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Dividends (net of nonrebatable foreign taxes withheld at source of $61,829) ...... $ 504,729
Interest income .................................................................. 145,886
------------
Total investment income ........................................................ 650,615
------------
Expenses:
Management fee .................................................................. 270,532
Bookkeeping fee ................................................................. 27,000
Transfer agent fee .............................................................. 7,500
Audit fee ....................................................................... 21,150
Printing expense ................................................................ 3,812
Trustees' expense ............................................................... 3,148
Custodian fee ................................................................... 57,071
Legal fee ....................................................................... 3,518
Amortization of organization expense ............................................ 4,318
Miscellaneous expense ........................................................... 4,929
------------
Total expenses ................................................................. 402,978
------------
Net investment income ............................................................ 247,637
Realized and unrealized gains (losses) on investments and foreign currency transactions:
Net realized gains on investments ............................................... 1,240,608
Net realized losses on foreign currency transactions ............................ (60,375)
Unrealized depreciation on investments and foreign currency transactions ........ (2,415,992)
------------
Net decrease in net assets resulting from operations ............................. $ (988,122)
============
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Liberty Variable Investment Trust Colonial International Fund for Growth,
Variable Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, December 31,
1997 1996
---------------- ---------------
<S> <C> <C>
Operations:
Net investment income ........................................................... $ 247,637 $ 207,697
Net realized gains on investments ............................................... 1,240,608 1,628,143
Net realized losses on foreign currency transactions ............................ (60,375) (41,603)
Change in unrealized depreciation on investments and foreign currency
transactions .................................................................... (2,415,992) (520,184)
------------- ------------
Net increase (decrease) in net assets resulting from operations ................. (988,122) 1,274,053
------------- ------------
Distributions declared from:
Net investment income ........................................................... (247,637) --
In excess of net investment income .............................................. (352,525) --
Net realized gains .............................................................. (1,215,847) (1,535,936)
------------- ------------
Total distributions ............................................................. (1,816,009) (1,535,936)
------------- ------------
Fund share transactions:
Proceeds from fund shares sold .................................................. 20,868,051 6,030,306
Cost of fund shares repurchased ................................................. (15,873,163) (3,475,389)
Distributions reinvested ........................................................ 1,816,009 1,535,936
------------- ------------
Net increase in net assets resulting from fund share transactions ................ 6,810,897 4,090,853
------------- ------------
Total increase in net assets ..................................................... 4,006,766 3,828,970
Net assets:
Beginning of period ............................................................. 26,593,047 22,764,077
------------- ------------
End of period ................................................................... $ 30,599,813 $ 26,593,047
------------- ------------
Accumulated overdistributed net investment income included in ending net assets $ (171,584) $ (3,447)
============= ============
Analysis of changes in shares of beneficial interest:
Shares sold ..................................................................... 10,248,160 2,963,621
Shares redeemed ................................................................. (7,607,101) (1,708,699)
Distributions reinvested ........................................................ 987,446 787,660
------------- ------------
Net increase ..................................................................... 3,628,505 2,042,582
============= ============
</TABLE>
See Notes to Financial Statements.
31
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Liberty Variable Investment Trust Colonial International Fund for Growth,
Variable Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------
1997 1996 1995
---------------- ---------------- ----------------
<S> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period ......................... $ 1.96 $ 1.97 $ 1.88
------- ------- ---------
Net investment income (a) .................................... 0.02 0.02 0.01
Net realized and unrealized gains (losses) on investments and
foreign currency transactions ............................... (0.08) 0.09 0.10
------- ------- ---------
Total from investment operations ............................. (0.06) 0.11 0.11
------- ------- ---------
Less distributions from:
Dividends from net investment income ........................ (0.02) -- (0.02)
In excess of net investment income .......................... (0.02) -- --
Dividends from net realized gains ........................... (0.08) (0.12) --
------- --------- ---------
Total distributions ......................................... (0.12) (0.12) (0.02)
------- --------- ---------
Net asset value, end of period ............................... $ 1.78 $ 1.96 $ 1.97
======= ========= =========
Total return:
Total investment return (b) ................................. (3.27)% 5.61% 5.85%
Ratios/supplemental data:
Net assets, end of period (000) .............................. $30,600 $26,593 $22,764
Ratio of net expenses to average net assets .................. 1.34%(c) 1.40%(c) 1.40%(c)
Ratio of net investment income to average net assets ......... 0.82%(c) 0.84%(c) 0.75%(c)
Portfolio turnover ratio ..................................... 28% 115% 40%
Average commission rate (d) .................................. $0.0082 $0.0010 --
<CAPTION>
Period
Ended
December 31,
----------------
1994***
----------------
<S> <C>
Per share operating performance:
Net asset value, beginning of period ......................... $ 2.00
-------
Net investment income (a) .................................... --
Net realized and unrealized gains (losses) on investments and
foreign currency transactions ............................... (0.12)
---------
Total from investment operations ............................. (0.12)
---------
Less distributions from:
Dividends from net investment income ........................ --
In excess of net investment income .......................... --
Dividends from net realized gains ........................... --
---------
Total distributions ......................................... --
---------
Net asset value, end of period ............................... $ 1.88
=========
Total return:
Total investment return (b) ................................. (6.00)%**
Ratios/supplemental data:
Net assets, end of period (000) .............................. $19,146
Ratio of net expenses to average net assets .................. 1.74%*
Ratio of net investment income to average net assets ......... 0.13%*
Portfolio turnover ratio ..................................... 31%**
Average commission rate (d) .................................. --
</TABLE>
* Annualized
** Not Annualized
*** For the period from the commencement of operations May 2, 1994 to December
31, 1994.
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
(d) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged.
Federal Income Tax footnote (unaudited)
100% of the gain distribution recorded and paid in August 1997 was derived from
long term gains.
53.21% of the gain distribution recorded in December 1997 and paid in January
1998 was derived from long term gains.
See Notes to Financial Statements.
32
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
Liberty Variable Investment Trust Colonial Strategic Income Fund, Variable
Series / December 31, 1997
- --------------------------------------------------------------------------------
Par Value
--------------- -------------
BONDS & NOTES--91.8%
CORPORATE FIXED-INCOME BONDS & NOTES--40.5%
Construction--0.8%
Building Construction
Falcon Building Products, stepped
coupon (10.50% 06/15/02) (a)
06/15/07 (b) ........................... $ 500,000 $ 331,250
USG Corp., 9.250% 09/15/01 ................ 250,000 272,188
-----------
603,438
-----------
Manufacturing--15.4%
Chemicals and Allied Products--2.5%
Agricultural Minerals Co., L.P.,
10.750% 09/30/03 ....................... 200,000 214,500
LaRoche Industries, Inc., 9.500%
09/15/07 (b) ........................... 500,000 495,000
Revlon Worldwide Corp., (c)
03/15/98 ............................... 500,000 493,750
Sterling Chemicals, Inc., 11.250%
04/01/07 ............................... 600,000 600,000
-----------
1,803,250
-----------
Electronic and Electrical Equipment--0.8%
UNISYS Corp., 11.750% 10/15/04 ............ 500,000 572,500
-----------
Fabricated Metal--1.8%
Euramax International, PLC.,
11.250% 10/01/06 (d) ................... 250,000 270,625
Renco Metals, Inc., 11.500%
07/01/03 ............................... 500,000 530,000
U.S. Can Corp., 10.125% 10/15/06 .......... 500,000 527,500
-----------
1,328,125
-----------
Lumber & Wood Products--0.4%
Triangle Pacific Corp., 10.500%
08/01/03 ............................... 250,000 264,375
-----------
Machinery and Computer Equipment--1.5%
IMO Industries, Inc., 11.750%
05/01/06 ............................... 500,000 552,500
Nortek, Inc., 9.875% 03/01/04 ............. 500,000 511,250
-----------
1,063,750
-----------
Miscellaneous Manufacturing--1.2%
AEI Holding Co., 10.000%
11/15/07 (b) ........................... 500,000 515,000
American Standard Co., stepped
coupon, (10.500% 06/01/98) (a)
06/01/05 ............................... 350,000 355,250
-----------
870,250
-----------
Paper Products--1.4%
Riverwood International Corp.,
10.625% 08/01/07 ....................... 500,000 505,000
Stone Container Corp., 10.750%
10/01/02 ............................... 500,000 521,250
-----------
1,026,250
-----------
Par Value
--------------- -----------
Primary Metal--2.2%
Algoma Steel, Inc., 12.375%
07/15/05 ............................... $ 500,000 $ 582,500
Kaiser Aluminum & Chemical
Corp., 10.875% 10/15/06 ................ 500,000 540,000
Keystone Consolidated Industries,
Inc., 9.625% 08/01/07 (b) .............. 500,000 502,500
-----------
1,625,000
-----------
Printing and Publishing--0.7%
Hollinger International Publishing,
Inc., 9.250% 03/15/07 .................. 500,000 527,500
-----------
Transportation Equipment--2.9%
Aftermarket Technology Corp.,
Series B, 12.000% 08/01/04 ............. 323,000 358,530
Collins & Aikman Products Co.,
11.500% 04/15/06 ....................... 500,000 561,875
Johnstown America Industries,
Inc., 11.750% 08/15/05 ................. 500,000 547,500
LDM Technologies, Inc., 10.750%
01/15/07 ............................... 600,000 654,000
-----------
2,121,905
-----------
Mining & Energy--2.5%
Crude Petroleum and Natural Gas--0.4%
Ferrellgas Finance Corp., L.P.,
10.000% 08/01/01 ....................... 250,000 265,000
-----------
Oil and Gas Extraction--2.1%
Gulf Canada Resources Ltd.,
9.250% 01/15/04 (e) .................... 250,000 262,733
Magnum Hunter Resources, Inc.,
10.000% 06/01/07 ....................... 1,000,000 1,027,500
Nuevo Energy Co., 9.500%
04/15/06 ............................... 250,000 265,938
-----------
1,556,171
-----------
Retail Trade--0.7%
Food Stores--0.3%
Pathmark Stores, Inc., 9.625%
05/01/03 ............................... 250,000 230,000
-----------
Miscellaneous Retail--0.4%
Finlay Fine Jewelry Corp., 10.625%
05/01/03 ............................... 250,000 262,500
-----------
Services--5.7%
Amusement and Recreation--0.7%
Grand Casinos, 9.000%
10/15/04 (b) ........................... 500,000 502,500
-----------
Business Services--0.7%
Ameriserv Food Co., 10.125%
07/15/07 ............................... 500,000 525,000
-----------
Health Services--1.1%
Tenet Healthcare Corp., 10.125%
03/01/05 ............................... 750,000 817,500
-----------
See Notes to Investment Portfolio.
33
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Liberty Variable Investment Trust Colonial Strategic Income Fund, Variable
Series / December 31, 1997
- --------------------------------------------------------------------------------
Par Value
--------------- ------------
Hotels Camps and Lodging--2.4%
Eldorado Resorts Corp., 10.500%
08/15/06 ........................... $ 500,000 $ 547,500
HMH Properties, Inc., 9.500%
05/15/05 ........................... 250,000 266,563
Horseshoe Gaming LLC, 9.375%
06/15/07 ........................... 600,000 628,500
Wyndham Hotel Corp., 10.500%
05/15/06 ........................... 250,000 295,000
-----------
1,737,563
-----------
Miscellaneous Services--0.8%
Borg-Warner Security Corp.,
9.625% 03/15/07 .................... 600,000 634,500
-----------
Transportation, Communication, Electric,
Gas & Sanitary Services--15.4%
Air Transportation--1.2%
U.S. Airways Group, Inc., Pass
Through Certificates 10.375%
03/01/13 ........................... 500,000 561,250
United Airlines, Inc., 9.200%
03/22/08 ........................... 267,975 303,291
-----------
864,541
-----------
Broadcasting--1.5%
NWCG Holding Corp., (c) 06/15/99 425,000 388,046
Young Broadcasting Corp.,
11.750% 11/15/04 ................... 650,000 719,875
-----------
1,107,921
-----------
Cable--4.1%
Bell Cablemedia PLC, stepped
coupon, (11.950% 07/15/99) (a)
07/15/04 (d) ....................... 400,000 376,000
Comcast U.K. Cable Partners Ltd.,
stepped coupon, (11.200%
11/15/00) (a) 11/15/07 ............. 500,000 406,250
Marcus Cable Co., L.P.:
stepped coupon,
(14.250% 06/15/00) (a) 12/15/05 600,000 517,500
11.875% 10/01/05 ..................... 500,000 542,500
Northland Cable, 10.250%
11/15/07 (b) ....................... 500,000 527,500
Telewest Communication PLC,
stepped coupon, (11.000%
10/01/00) (a) 10/01/07 (d) ......... 500,000 388,750
Videotron Holding PLC, stepped
coupon, (11.000% 08/15/00) (a)
08/15/05 (d) ....................... 250,000 220,938
-----------
2,979,438
-----------
Communications--1.9%
Adelphia Communications Corp.,
9.875% 03/01/07 .................... 500,000 532,500
Allbritton Communications Co.,
9.750% 11/30/07 .................... 500,000 511,250
Par Value
------------ -----------
Intermedia Communications, Inc.,
stepped coupon, (11.250%
07/15/02) (a) 07/15/07 ............. $ 500,000 $ 358,750
-----------
1,402,500
-----------
Electrical Services--0.2%
California Energy Co., Inc., 9.500%
09/15/06 ........................... 150,000 163,875
-----------
Gas Services--1.0%
California Energy Co., Inc., 9.875%
06/30/03 ........................... 400,000 430,000
HS Resources, Inc., 9.250%
11/15/06 ........................... 275,000 282,563
-----------
712,563
-----------
Sanitary Services--0.7%
Allied Waste North America, Inc.,
10.250% 12/01/06 ................... 500,000 548,750
-----------
Telecommunication--4.8%
Brooks Fiber Properties, Inc.,
stepped coupon, (10.875%
03/01/01) (a) 03/01/06 ............. 150,000 125,250
Comcast Cellular Corp., 9.500%
05/01/07 (b) ....................... 500,000 522,500
Echostar Communications Corp.,
stepped coupon, (12.875%
06/01/99) (a) 06/01/04 ............. 500,000 457,500
ICG Holding, Inc., stepped
coupon, (13.500% 09/15/00) (a)
09/15/05 ........................... 500,000 404,375
Nextel Communications, Inc.
stepped coupon (9.750%
10/31/02) (a) 10/31/07 (b) ......... 500,000 307,500
Sprint Spectrum L.P., stepped
coupon, (12.500% 08/15/01) (a)
08/15/06 ........................... 1,100,000 858,000
Teleport Communications Group,
Inc., stepped coupon, (11.125%
07/01/01) (a) 07/01/07 ............. 1,000,000 821,250
-----------
3,496,375
-----------
Total Corporate Fixed-Income
Bonds & Notes (cost of $28,510,329)................. 29,613,040
-----------
U.S. Government & Agency Obligations--29.5%
U.S. Treasury Bonds:
8.750% 05/15/17 .................... 6,046,000 7,926,850
11.625% 11/15/04 ................... 2,954,000 3,920,962
-----------
11,847,812
-----------
U.S. Treasury Notes, 11.875%
11/15/03 (f) ....................... 7,489,000 9,741,541
-----------
Total U.S. Government & Agency Obligations
(cost of $20,861,261)................................. 21,589,353
-----------
See Notes to Investment Portfolio.
34
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Liberty Variable Investment Trust Colonial Strategic Income Fund, Variable
Series / December 31, 1997
- --------------------------------------------------------------------------------
Currency Par Value
---------- -------------- --------------
Foreign Government & Agency Obligations--21.6%
Argentina Global Bonds,
11.375% 01/30/17 (g) ......... $ 320,000 $ 350,202
Government of Sweden,
10.250% 05/05/03 ............. SK 9,500,000 1,442,248
Kingdom of Denmark,
8.000% 03/15/06 .............. DK 11,670,000 1,971,492
Mexican Brady Bond Series A,
6.250% 12/31/19 (h) .......... 400,000 333,000
Mexican Global Bonds,
9.750% 02/06/01 (h) .......... 545,000 567,481
9.875% 01/15/07 (h) ............ 320,000 333,200
Poland Non-U.S. Global
Registered Bond,
6.688% 10/27/24 (j) .......... 728,000 706,611
Republic of Poland (Brady),
Past Due Interest,
stepped coupon,
(5.00% 10/27/98)
4.000% 10/27/14 (k) .......... 852,000 735,915
Republic of Venezuela
Global Bond, 9.250%
09/15/27 (l) ................. 580,000 518,375
Republic of Argentina
11.250% 04/10/06 (m) ......... DM 700,000 430,081
Russian Ministry of
Finance, 9.000%
03/25/04 (i) ................. DM 1,100,000 585,627
Spanish Government Bonds,
10.000% 02/28/05 ............. SP 153,700,000 1,276,690
Treasury Corp. of Victoria,
10.250% 11/15/06 ............. A$ 1,950,000 1,609,637
12.500% 10/15/03 ............. A$ 1,720,000 1,470,797
United Kingdom Treasury,
10.000% 02/26/01 ............. UK 650,000 1,168,213
9.000% 08/06/12 .............. UK 440,000 906,902
10.000% 09/08/03 ............. UK 735,000 1,408,919
-----------
Total Foreign Government & Agency Obligations
(cost of $16,119,618)....................................... 15,815,390
-----------
Non-Agency Mortgage Backed Securities--0.2%
MDC Mortgage Funding Corp., CMO,
8.850% 03/20/18 (cost of $136,499) 131,822 138,578
-----------
Total Bonds & Notes (cost of $65,627,707).................... 67,156,361
-----------
Shares
-------
PREFERRED STOCKS--2.4%
Transportation, Communication, Electric,
Gas & Sanitary Services
Cable
Cablevision Systems Corp.,
11.125% Series M PIK ......... 5,001 582,655
Time Warner, Inc. 10.25%
Preferred, Series M .......... 1,065 1,195,012
---------
Shares Value
-------- ------------
Total Preferred Stocks
(cost of $1,705,035)................................. $ 1,777,667
-----------
Rights--0.0% (n)
General Government
Mexican Government, Series
A and B (cost of $0) (o)............. 400,000 (p)
-------------
Total Investments--94.2%
(cost of $67,332,742) (q)............................ 68,934,028
-----------
Par
-------
Short Term Obligations--4.9%
Repurchase agreement with ABN
AMRO Chicago Corp., dated
12/31/97, due 01/02/98 at 6.600%,
collateralized by U.S. Treasury
notes with various maturities to
2016, market value $3,662,578
(repurchase proceeds $3,581,313) $3,580,000 3,580,000
-----------
Foreign Currency Contracts--0.2% (r) ................... 125,714
Other Assets and Liabilities, Net--0.7% ................ 535,275
-----------
Net Assets--100.0% ..................................... $73,175,017
===========
Notes to Investment Portfolio:
(a) Currently zero coupon. Shown parenthetically is the interest rate to be
paid and the date the Fund will begin accruing this rate.
(b) Security is exempt from registration under Rule 144-A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
1997, the value of these securities amounted to $3,703,750 or 5.1% of net
assets.
(c) Zero coupon bond.
(d) This is a British security. Par amount is stated in U.S. dollars.
(e) This is a Canadian security. Par amount is stated in U.S. dollars.
(f) This security, or a portion thereof, with a total market value of
$8,258,853 is being used to collateralize the forward currency contracts
shown below.
(g) This is an Argentinean security. Par amount is stated in U.S. dollars.
(h) This is a Mexican security. Par amount is stated in U.S. dollars.
(i) This is a Russian security. Par amount is stated in German Deutschemarks.
(j) This is a Polish security. Par amount is stated in U.S. dollars.
Interest rate shown is a floating rate coupon which changes every six
months.
(k) This is a Polish security. Par amount is stated in U.S. dollars. Shown
parenthetically is the interest rate to be paid and the date the Fund will
begin accruing this rate.
(l) This is a Venezuelan security. Par amount is stated in U.S. Dollars.
(m) This is an Argentinean security. Par amount is stated in German
Deutschmarks.
(n) Non-income producing.
(o) Represents fair value as determined in good faith under the direction of
the Trustees.
(p) Rounds to less than one.
(q) Cost for federal income tax purposes is $67,359,932. Gross unrealized
appreciation (depreciation) at December 31, 1997 is as follows:
Gross unrealized appreciation $2,257,484
Gross unrealized depreciation $ (683,388)
----------
Net unrealized appreciation $1,574,096
==========
(r) As of December 31, 1997, the Fund had entered into the following forward
currency exchange contracts:
See Notes to Investment Portfolio.
35
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Liberty Variable Investment Trust Colonial Strategic Income Fund, Variable
Series / December 31, 1997
- --------------------------------------------------------------------------------
Net Unrealized
Appreciation
Contracts Settlement (Depreciation)
to deliver In exchange for Date (U.S. $)
- ------------------ ------------------- ------------ ---------------
UK 1,631,000 US$ 2,657,952 01/22/1998 $ (27,955)
A$ 89,000 US$ 58,194 02/09/1998 203
A$ 4,751,000 US$ 3,222,031 01/08/1998 128,673
DM 290,000 US$ 163,793 01/15/1998 2,410
DM 209,000 US$ 118,045 01/16/1998 1,730
FF 2,036,000 US$ 343,530 01/20/1998 5,130
DK 3,516,000 US$ 521,553 01/14/1998 7,907
SK 2,987,000 US$ 384,210 01/12/1998 7,616
---------
$ 125,714
=========
Summary of Securities by Currency
Currency Value % of Total
---------- -------------- -----------
United States ........... $ $51,599,592 74.8%
United Kingdom .......... UK 4,740,347 6.9
Australia ............... A$ 3,080,434 4.5
Denmark ................. DK 1,971,492 2.9
Poland .................. 1,442,526 2.1
Sweden .................. SK 1,442,248 2.1
Spain ................... SP 1,276,690 1.9
Mexico .................. 1,233,681 1.8
Argentina ............... 780,283 1.1
Russia .................. 585,627 0.8
Venezuela ............... 518,375 0.7
Canada .................. 262,733 0.4
----------- -----
$68,934,028 100.0%
=========== =====
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
Acronym Name
- ----------- ----------------
PIK Payment-In-Kind
DM Deutschemarks
FF French Francs
See Notes to Financial Statements.
36
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Liberty Variable Investment Trust Colonial Strategic Income Fund, Variable
Series / December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $67,332,742) .......................... $68,934,028
Short-term obligations .............................................................. 3,580,000
Cash ................................................................................ 659
Dividends and interest receivable ................................................... 1,392,425
Unrealized appreciation on forward currency exchange contracts ...................... 125,714
Receivable for fund shares sold ..................................................... 76,806
Expense reimbursement due from Adviser .............................................. 6,493
Unamortized organization expenses ................................................... 5,987
Other assets ........................................................................ 2,987
-----------
Total assets ...................................................................... 74,125,099
-----------
Liabilities:
Payable for fund shares repurchased ................................................. 514,875
Payable for investments purchased ................................................... 366,872
Management fee payable .............................................................. 39,809
Bookkeeping fee payable ............................................................. 2,894
Transfer agent fee payable .......................................................... 625
Accrued expenses payable ............................................................ 25,007
-----------
Total liabilities ................................................................. 950,082
-----------
Net assets .......................................................................... $73,175,017
===========
Net assets represented by:
Paid-in capital .................................................................... $71,561,351
Accumulated overdistributed net investment income .................................. (23,401)
Accumulated net realized losses on investments and foreign currency transactions ... (78,152)
Net unrealized appreciation on investments and foreign currency transactions ....... 1,715,219
-----------
Total net assets applicable to outstanding shares of beneficial interest ............ $73,175,017
===========
Shares of beneficial interest outstanding ........................................... 6,565,006
===========
Net asset value per share ........................................................... $11.15
======
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Interest income ........................................................................ $5,209,170
Dividends .............................................................................. 117,721
----------
Total investment income .............................................................. 5,326,891
----------
Expenses:
Management fee ........................................................................ 399,569
Bookkeeping fee ....................................................................... 31,551
Transfer agent fee .................................................................... 7,500
Audit fee ............................................................................. 20,197
Printing expense ...................................................................... 9,885
Trustees' expense ..................................................................... 5,822
Custodian fee ......................................................................... 17,869
Legal fee ............................................................................. 7,481
Amortization of organization expense .................................................. 3,971
Miscellaneous expense ................................................................. 3,626
----------
Total expenses ....................................................................... 507,471
----------
Less:
Expenses reimbursable by Manager ...................................................... (15,222)
----------
Net expenses ........................................................................... 492,249
----------
Net investment income .................................................................. 4,834,642
Realized and unrealized gains (losses) on investments and foreign currency transactions:
Net realized losses on investments .................................................... (557,481)
Net realized gains on foreign currency transactions ................................... 1,104,281
Unrealized appreciation on investments and foreign currency transactions .............. 101,719
----------
Net increase in net assets resulting from operations ................................... $5,483,161
==========
</TABLE>
See Notes to Financial Statements.
37
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Liberty Variable Investment Trust Colonial Strategic Income Fund, Variable
Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, December 31,
1997 1996
---------------- ---------------
<S> <C> <C>
Operations:
Net investment income ............................................................. $ 4,834,642 $ 4,018,142
Net realized gains (losses) on investments ........................................ (557,481) 259,150
Net realized gains on foreign currency transactions ............................... 1,104,281 330,664
Change in unrealized appreciation on investments and foreign currency
transactions ..................................................................... 101,719 22,412
------------- -------------
Net increase in net assets resulting from operations .............................. 5,483,161 4,630,368
------------- -------------
Distributions declared from:
Net investment income ............................................................. (4,834,643) (4,244,982)
In excess of net investment income ................................................ (296,671) --
Net realized gains on investments ................................................. (328,008) (309,530)
In excess of net realized gains ................................................... (7,971) --
------------- -------------
Total distributions .............................................................. (5,467,293) (4,554,512)
------------- -------------
Fund share transactions:
Proceeds from fund shares sold .................................................... 29,075,205 15,151,911
Cost of fund shares repurchased ................................................... (14,776,284) (14,723,831)
Distributions reinvested .......................................................... 5,467,293 4,554,512
------------- -------------
Net increase in net assets resulting from fund share transactions .................. 19,766,214 4,982,592
------------- -------------
Total increase in net assets ....................................................... 19,782,082 5,058,448
Net assets:
Beginning of period ............................................................... 53,392,935 48,334,487
------------- -------------
End of period ..................................................................... $ 73,175,017 $ 53,392,935
============= =============
Accumulated overdistributed net investment income included in ending net assets $ (23,401) $ (5,726)
============= =============
Analysis of changes in shares of beneficial interest:
Shares sold ....................................................................... 2,534,934 1,337,261
Shares redeemed ................................................................... (1,299,060) (1,307,531)
Distributions reinvested .......................................................... 490,780 412,547
------------- -------------
Net increase ....................................................................... 1,726,654 442,277
============= =============
</TABLE>
See Notes to Financial Statements.
38
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Liberty Variable Investment Trust Colonial Strategic Income Fund, Variable
Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------
1997 1996 1995
---------------- ---------------- ----------------
<S> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period ............................. $ 11.04 $ 10.99 $ 9.79
--------- --------- ---------
Net investment income (a) ........................................ 0.90 0.92 0.55
Net realized and unrealized gains (losses) on investments and
foreign currency transactions ................................... 0.11 0.16 1.24
--------- --------- ---------
Total from investment operations ................................. 1.01 1.08 1.79
--------- --------- ---------
Less distributions:
Dividends from net investment income ............................ (0.79) (0.96) (0.56)
In excess of net investment income .............................. (0.05) -- --
Dividends from net realized gains ............................... (0.05) (0.07) (0.03)
In excess of net realized gains ................................. (0.01) -- --
--------- --------- ---------
Total distributions .............................................. (0.90) (1.03) (0.59)
--------- --------- ---------
Net asset value, end of period ................................... $ 11.15 $ 11.04 $ 10.99
========= ========= =========
Total return:
Total investment return (b)(c) ................................... 9.11% 9.83% 18.30%
Ratios/supplemental data:
Net assets, end of period (000) .................................. $ 73,175 $ 53,393 $ 48,334
Ratio of net expenses to average net assets (d) .................. 0.80%(e) 0.80%(e) 0.84%(e)
Ratio of net investment income to average net assets (c) ......... 7.86%(e) 8.13%(e) 8.08%(e)
Portfolio turnover ratio ......................................... 94% 114% 281%
<CAPTION>
Period
Ended
December 31,
-------------
1994***
-------------
<S> <C>
Per share operating performance:
Net asset value, beginning of period ............................. $ 10.00
--------
Net investment income (a) ........................................ 0.30
Net realized and unrealized gains (losses) on investments and
foreign currency transactions ................................... 0.19)
---------
Total from investment operations ................................. 0.11
---------
Less distributions:
Dividends from net investment income ............................ (0.31)
In excess of net investment income .............................. --
Dividends from net realized gains ............................... (0.01)
In excess of net realized gains ................................. --
---------
Total distributions .............................................. (0.32)
---------
Net asset value, end of period ................................... $ 9.79
=========
Total return:
Total investment return (b)(c) ................................... 1.10%**
Ratios/supplemental data:
Net assets, end of period (000) .................................. $ 13,342
Ratio of net expenses to average net assets (d) .................. 1.00%*
Ratio of net investment income to average net assets (c) ......... 7.33%*
Portfolio turnover ratio ......................................... 94%**
</TABLE>
* Annualized
** Not Annualized
*** For the period from the commencement of operations July 5, 1994 to
December 31, 1994.
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Computed giving effect to Manager's expense limitation undertaking.
(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, these ratios would have been 0.82%, 0.86%,
0.94% and 1.60% (annualized), respectively.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
Federal Income Tax footnote (unaudited)
97.63% of the gain distribution recorded in December 1997 and paid in January
1998 was derived from long term gains.
See Notes to Financial Statements.
39
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
Liberty Variable Investment Trust Colonial U.S. Stock Fund, Variable Series /
December 31, 1997
- --------------------------------------------------------------------------------
Shares Value
---------------- ------------------
COMMON STOCKS--92.4%
Agriculture, Forestry & Fishing--1.4%
Agricultural Services
RJR Nabisco Holdings Corp. ............ 34,800 $ 1,305,000
-----------
Finance, Insurance & Real Estate--20.5%
Depository Institutions--7.4%
Bankamerica Corp. ..................... 25,700 1,876,100
Chase Manhattan Corp. ................. 11,200 1,226,400
Citicorp .............................. 13,500 1,706,906
Comerica, Inc. ........................ 11,600 1,046,900
First Union Corp. ..................... 24,400 1,250,500
Nations Bank Corp. .................... 1,000 60,813
-----------
7,167,619
-----------
Insurance Carriers--6.3%
Mercury General Corp. ................. 16,400 906,100
Old Republic International Corp. ...... 25,550 950,141
Travelers, Inc. ....................... 45,399 2,445,871
United Healthcare Corp. ............... 21,800 1,083,188
Wellpoint Health Networks, Inc.,
Class A ............................ 16,100 680,225
-----------
6,065,525
-----------
Nondepository Credit Institutions--4.3%
American Express Co. .................. 17,400 1,552,950
Green Tree Financial Corp. ............ 19,000 497,562
Hartford Financial Services Group ..... 9,700 907,556
Student Loan Marketing
Association ........................ 8,300 1,158,888
-----------
4,116,956
-----------
Security Brokers & Dealers--2.5%
Bear Stearns Companies, Inc. .......... 24,700 1,173,250
Lehman Brothers Holdings, Inc. ........ 15,000 765,000
Merrill Lynch & Co., Inc. ............. 6,400 466,800
-----------
2,405,050
-----------
Manufacturing--44.3%
Apparel--1.2%
VF Corp. .............................. 26,200 1,203,563
-----------
Chemicals & Allied Products--10.1%
American Home Products Corp. .......... 12,000 918,750
Clorox Co. ............................ 6,200 490,187
Dow Chemical Co. ...................... 12,200 1,238,300
Eli Lilly & Co. ....................... 11,000 765,875
Johnson & Johnson ..................... 8,200 540,175
Jones Medical Industries, Inc. ........ 8,500 327,250
Merck & Co., Inc. ..................... 14,600 1,551,250
Procter & Gamble Co. .................. 7,600 606,575
Rohm & Haas Co. ....................... 8,200 785,150
Schering-Plough Corp. ................. 27,600 1,714,650
Warner-Lambert Co. .................... 6,500 806,000
-----------
9,744,162
-----------
Shares Value
---------------- ------------------
Communications Equipment--0.6%
Lucent Technologies, Inc. ............. 7,377 $ 589,238
-----------
Electrical Industrial Equipment--2.6%
General Electric Co. .................. 34,900 2,560,788
-----------
Electronic Components--1.3%
Intel Corp. ........................... 5,700 400,425
SCI Systems, Inc. (a) ................. 20,200 879,963
-----------
1,280,388
-----------
Food & Kindred Products--4.1%
Hershey Foods Corp. ................... 3,900 241,556
Interstate Bakeries Corp. ............. 18,000 668,250
Philip Morris Co., Inc. ............... 66,500 3,013,281
-----------
3,923,087
-----------
Furniture & Fixtures--2.3%
Hillenbrand Industries, Inc. .......... 10,000 512,500
Johnson Controls, Inc. ................ 14,400 687,600
Masco Corp. ........................... 19,500 992,062
-----------
2,192,162
-----------
Machinery & Computer Equipment--8.3%
Applied Materials, Inc. (a) ........... 13,200 397,650
Caterpillar, Inc. ..................... 20,000 971,250
Compaq Computer Corp. ................. 15,000 846,562
Digital Equipment Corp. (a) ........... 25,200 932,400
EMC Corp. (a) ......................... 48,200 1,322,487
Ingersoll Rand Co. .................... 10,800 432,675
Storage Technology Corp. (a) .......... 8,800 545,050
Sun Microsystems, Inc. (a) ............ 26,400 1,052,700
Tyco International Ltd. ............... 33,200 1,496,075
-----------
7,996,849
-----------
Measuring & Analyzing Instruments--3.5%
Honeywell, Inc. ....................... 5,400 369,900
Raytheon Co. Class B .................. 20,600 1,040,300
Tektronix, Inc. ....................... 12,900 511,969
Thermo Electron Corp. (a) ............. 31,900 1,419,550
-----------
3,341,719
-----------
Petroleum Refining--7.1%
Ashland Oil, Inc. ..................... 9,500 510,031
Atlantic Richfield Co. ................ 15,600 1,249,950
Chevron Corp. ......................... 2,600 200,200
Exxon Corp. ........................... 18,500 1,131,969
Mobil Corp. ........................... 16,800 1,212,750
Phillips Petroleum Co. ................ 6,800 330,650
Texaco, Inc. .......................... 15,400 837,375
USX-Marathon Group .................... 42,700 1,441,125
-----------
6,914,050
-----------
Primary Metal--0.5%
USX-US Steel Group .................... 15,000 468,750
-----------
See Notes to Investment Portfolio.
40
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Liberty Variable Investment Trust Colonial U.S. Stock Fund, Variable Series /
December 31, 1997
- --------------------------------------------------------------------------------
Shares Value
---------------- ------------------
Transportation Equipment--2.7%
General Dynamics Corp. ................. 10,000 $ 864,375
Textron, Inc. .......................... 14,600 912,500
United Technologies Corp. .............. 11,500 837,344
-----------
2,614,219
-----------
Mining & Energy--0.7%
Crude Petroleum & Natural Gas--0.4%
Burlington Resources, Inc. ............. 9,500 425,719
-----------
Nonmetallic, Except Fuels--0.3%
Vulcan Materials Co. ................... 2,800 285,950
-----------
Retail Trade--8.1%
Apparel & Accessory Stores--1.8%
TJX Companies, Inc. .................... 52,000 1,787,500
-----------
Food Stores--1.4%
Safeway, Inc. (a) ...................... 21,835 1,378,334
-----------
General Merchandise Stores--3.1%
Dayton Hudson Corp. .................... 20,500 1,387,594
Federated Department Stores,
Inc. (a) ............................ 23,000 990,438
Sears, Roebuck & Co. ................... 14,000 633,500
-----------
3,011,532
-----------
Home Furnishings & Equipment--0.2%
CompUSA, Inc. (a) ...................... 7,600 235,600
-----------
Miscellaneous Retail--1.6%
Office Depot, Inc. (a) ................. 65,100 1,558,331
-----------
Services--5.0%
Business Services--1.3%
Cendant Corp. (a) ...................... 35,566 1,222,577
-----------
Computer Related Services--0.5%
Cadence Design Systems, Inc. (a) ....... 18,000 441,000
-----------
Computer Software--1.6%
Microsoft Corp. (a) .................... 12,100 1,563,925
-----------
Health Services--0.8%
Tenet Healthcare Corp. (a) ............. 22,815 755,747
-----------
Hotels, Camps & Lodging--0.8%
Hilton Hotels Corp. .................... 25,000 743,750
-----------
Transportation, Communication, Electric,
Gas & Sanitary Services--11.5%
Air Transportation--1.7%
Continental Airlines, Class B (a) ...... 15,000 721,875
Delta Air Lines, Inc. .................. 800 95,250
U.S. Airways Group, Inc. (a) ........... 12,700 793,750
-----------
1,610,875
-----------
Communications--5.4%
Ameritech Corp. ........................ 17,600 1,416,800
Bell Atlantic Corp. .................... 7,768 705,917
Shares Value
---------------- -------------
Bellsouth Corp. ........................ 9,000 $ 506,812
SBC Communications, Inc. ............... 17,381 1,273,158
U.S. West Communications Group.......... 28,600 1,288,788
-----------
5,191,475
-----------
Electric, Gas & Sanitary Services--0.5%
Enova Corp. ............................ 18,400 497,950
-----------
Electric Services--3.2%
FPL Group, Inc. ........................ 9,000 532,687
GPU, Inc. .............................. 27,500 1,158,438
Long Island Lighting Co. ............... 31,000 933,875
NIPSCO Industries, Inc. ................ 10,300 509,206
-----------
3,134,206
-----------
Motor Freight & Warehousing--0.7%
CNF Transportation ..................... 18,000 688,500
-----------
Wholesale Trade--0.9%
Nondurable Goods
Bergen Brunswig Corp., Class A ......... 10,700 450,737
Richfood Holdings, Inc. ................ 15,850 447,763
-----------
898,500
-----------
Total Common Stocks
(cost of $70,140,195).............................
89,320,596
-----------
Par
------
CORPORATE FIXED-INCOME BONDS--3.8%
Finance, Insurance & Real Estate--2.1%
Depository Institutions--0.5%
Fleet/Norstar, 8.125% 07/01/04 ......... $ 500,000 544,525
-----------
Nondepository Credit Institutions--1.6%
Ford Motor Credit Co., 8.000%
06/15/02 ............................ 1,000,000 1,066,880
Household Finance Co., 8.250%
02/15/05 ............................ 400,000 439,440
-----------
1,506,320
-----------
Manufacturing--1.1%
Transportation Equipment
General Motors Notes, 9.125%
07/15/01 ............................ 1,000,000 1,089,800
-----------
Retail Trade--0.6%
General Merchandise Stores
Wal-Mart Stores, Inc., 8.625%
04/01/01 ............................ 500,000 537,690
-----------
Total Corporate Fixed-Income Bonds
(cost of $3,674,015).............................. 3,678,335
----------
Total Investments--96.2%
(cost of $73,814,211) (b).........................
92,998,931
-----------
See Notes to Investment Portfolio.
41
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Liberty Variable Investment Trust Colonial U.S. Stock Fund, Variable Series /
December 31, 1997
- --------------------------------------------------------------------------------
Par Value
------------- ------------
SHORT-TERM OBLIGATIONS--2.7%
Repurchase agreement with ABN
AMRO Chicago Corp., dated
12/31/97, due 01/02/98 at
6.600%, collateralized by U.S.
Treasury notes with various
maturities to 2016, market value
$2,707,034 (repurchase proceeds
$2,646,970)..................... $2,646,000 $2,646,000
----------
Other Assets & Liabilities, Net--1.1% $ 1,070,210
-----------
Net Assets--100% .................... $96,715,141
===========
Notes to Investment Portfolio:
(a) Non-income producing.
(b) The cost for federal income tax purposes is $73,816,189. Gross
unrealized appreciation and depreciation at December 31, 1997 is as
follows:
Gross unrealized appreciation $ 20,845,409
Gross unrealized depreciation (1,662,667)
------------
Net unrealized appreciation $ 19,182,742
============
See Notes to Financial Statements.
42
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Liberty Variable Investment Trust Colonial U.S. Stock Fund, Variable Series /
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $73,814,211) .............. $92,998,931
Short-term obligations .................................................. 2,646,000
Cash .................................................................... 587
Receivable for fund shares sold ......................................... 929,965
Dividends and interest receivable ....................................... 223,181
Unamortized organization expenses ....................................... 5,987
Other assets ............................................................ 905
-----------
Total assets .......................................................... 96,805,556
-----------
Liabilities:
Payable for fund shares bought .......................................... 104
Management fee payable .................................................. 63,221
Bookkeeping fee payable ................................................. 3,511
Transfer agent fee payable .............................................. 625
Accrued expenses payable ................................................ 22,954
-----------
Total liabilities ..................................................... 90,415
-----------
Net assets .............................................................. $96,715,141
===========
Net assets represented by:
Paid-in capital ........................................................ $77,629,754
Accumulated overdistributed net investment income ...................... (47,967)
Accumulated net realized losses on investments ......................... (51,366)
Net unrealized appreciation on investments ............................. 19,184,720
-----------
Total net assets applicable to outstanding shares of beneficial interest $96,715,141
===========
Shares of beneficial interest outstanding ............................... 5,935,957
===========
Net asset value per share ............................................... $16.29
======
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Dividends .................................................... $ 1,303,865
Interest income .............................................. 360,196
-----------
Total investment income .................................... 1,664,061
-----------
Expenses:
Management fee .............................................. 623,484
Bookkeeping fee ............................................. 39,024
Transfer agent fee .......................................... 7,500
Audit fee ................................................... 16,900
Printing expense ............................................ 13,519
Trustees' expense ........................................... 6,446
Custodian fee ............................................... 4,978
Legal fee ................................................... 11,284
Amortization of organization expense ........................ 3,971
Miscellaneous expense ....................................... 4,826
-----------
Total expenses ............................................. 731,932
-----------
Net investment income ........................................ 932,129
Realized and unrealized gains on investments:
Net realized gains on investments ........................... 11,726,262
Change in unrealized appreciation on investments ............ 8,137,807
-----------
Net increase in net assets resulting from operations ......... $20,796,198
===========
</TABLE>
See Notes to Financial Statements.
43
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Liberty Variable Investment Trust Colonial U.S. Stock Fund, Variable Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, December 31,
1997 1996
---------------- ---------------
<S> <C> <C>
Operations:
Net investment income ................................................... $ 932,129 $ 727,665
Net realized gains on investments ....................................... 11,726,262 2,722,737
Change in unrealized appreciation on investments ........................ 8,137,807 6,906,156
------------- -------------
Net increase in net assets resulting from operations ..................... 20,796,198 10,356,558
------------- -------------
Distributions declared from:
Net investment income ................................................... (932,130) (692,338)
In excess of net investment income ...................................... (47,965) --
Net realized gains on investments ....................................... (11,726,262) (2,738,643)
In excess of net realized gains ......................................... (34,889) --
------------- -------------
Total distributions ...................................................... (12,741,246) (3,430,981)
------------- -------------
Fund share transactions:
Proceeds from fund shares sold .......................................... 29,081,474 17,615,945
Cost of fund shares repurchased ......................................... (14,017,158) (10,135,228)
Distributions reinvested ................................................ 12,741,246 3,430,981
------------- -------------
Net increase in net assets resulting from fund share transactions ........ 27,805,562 10,911,698
------------- -------------
Total increase in net assets ............................................. 35,860,514 17,837,275
Net assets:
Beginning of period ..................................................... 60,854,627 43,017,352
------------- -------------
End of period ........................................................... $ 96,715,141 $ 60,854,627
============= =============
Accumulated overdistributed net investment income included
in ending net assets .................................................... $ (47,967) $ (1)
============= =============
Analysis of changes in shares of beneficial interest:
Shares sold ............................................................. 1,713,649 1,304,388
Shares redeemed ......................................................... (842,285) (742,371)
Distributions reinvested ................................................ 785,527 237,611
------------- -------------
Net increase ............................................................. 1,656,891 799,628
============= =============
</TABLE>
See Notes to Financial Statements.
44
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Liberty Variable Investment Trust Colonial U.S. Stock Fund, Variable Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------
1997 1996 1995
---------------- ---------------- ----------------------
<S> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period ......................... $ 14.22 $ 12.36 $ 10.27
------- ------- -----------
Net investment income (a) .................................... 0.20 0.19 0.21
Net realized and unrealized gains on investments ............. 4.37 2.52 2.84
------- ------- -----------
Total from investment operations ............................. 4.57 2.71 3.05
------- ------- -----------
Less distributions:
Dividends from net investment income ........................ (0.18) (0.17) (0.16)
In excess of net investment income .......................... (0.01) -- --
Dividends from net realized gains ........................... (2.30) (0.68) (0.80)
In excess of net realized gains ............................. (0.01) -- --
--------- --------- -----------
Total distributions .......................................... (2.50) (0.85) (0.96)
--------- --------- -----------
Net asset value, end of period ............................... $ 16.29 $ 14.22 $ 12.36
========= ========= ===========
Total return:
Total investment return (b) ................................. 32.23% 21.84% 29.70%(c)
Ratios/supplemental data:
Net assets, end of period (000) .............................. $96,715 $60,855 $43,017
Ratio of net expenses to average net assets .................. 0.94%(e) 0.95%(e) 1.00%(d)(e)
Ratio of net investment income to average net assets ......... 1.19%(e) 1.39%(e) 1.72%(c)(e)
Portfolio turnover ratio ..................................... 63% 77% 115%
Average commission rate (f) .................................. $0.0400 $0.0395 --
</TABLE>
Period
Ended
December 31,
-------------
1994***
-------------
Per share operating performance:
Net asset value, beginning of period ......................... $ 10.00
----------
Net investment income (a) .................................... 0.09
Net realized and unrealized gains on investments ............. 0.35
----------
Total from investment operations ............................. 0.44
----------
Less distributions:
Dividends from net investment income ........................ (0.11)
In excess of net investment income .......................... --
Dividends from net realized gains ........................... (0.06)
In excess of net realized gains ............................. --
----------
Total distributions .......................................... (0.17)
----------
Net asset value, end of period ............................... $ 10.27
==========
Total return:
Total investment return (b) ................................. 4.40%(c)**
Ratios/supplemental data:
Net assets, end of period (000) .............................. $15,373
Ratio of net expenses to average net assets .................. 1.00%(d)*
Ratio of net investment income to average net assets ......... 2.16%(c)*
Portfolio turnover ratio ..................................... 52%**
Average commission rate (f) .................................. --
* Annualized
** Not Annualized
*** For the period from the commencement of operations July 5, 1994 to
December 31, 1994.
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Computed giving effect to Manager's expense limitation undertaking.
(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, these ratios would have been 1.07% and
1.64% (annualized), respectively.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
(f) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged.
Federal Income Tax footnote (unaudited)
85.98% of the gain distribution recorded in December 1997 and paid in January
1998 was derived from long term gains.
See Notes to Financial Statements.
45
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
Liberty Variable Investment Trust Newport Tiger Fund, Variable Series /
December 31, 1997
- --------------------------------------------------------------------------------
Country
Abbrev. Shares Value
--------- ---------- ----------
COMMON STOCKS--94.0%
Construction--3.9%
Building Construction--3.9%
New World Infrastructure Ltd. HK 430,000 $ 968,469
----------
Finance, Insurance & Real Estate--58.0%
Depository Institutions--19.3%
Development Bank of
Singapore Ltd. ......................... Si 154,000 1,318,039
HSBC Holdings PLC ......................... HK 48,400 1,193,165
Hang Seng Bank ............................ HK 133,600 1,288,960
Oversea-Chinese Banking
Corp. Ltd. ............................. Si 174,200 1,014,657
----------
4,814,821
-----------
Holding & Other Investment Companies--16.6%
Cheung Kong Holdings Ltd. HK 168,000 1,100,441
Citic Pacific Ltd. ........................ HK 298,000 1,184,646
Guangdong Investments ..................... HK 882,200 586,403
Hutchison Whampoa Ltd. .................... HK 195,000 1,223,186
Taiwan Fund, Inc. ......................... Tw 3,000 49,500
----------
4,144,176
-----------
Insurance Carriers--0.8%
National Mutual Asia Ltd. ................. HK 200,000 198,766
----------
Real Estate--21.3%
Ayala Land, Inc., Class B ................. Ph 148,750 58,766
China Resources
Enterprises Ltd. ....................... HK 302,000 674,333
City Developments Ltd. .................... Si 246,000 1,140,446
Filinvest Development Corp. Ph 485,000 40,716
New World Development
Co., Ltd. .............................. HK 287,000 992,746
SM Prime Holdings, Inc. ................... Ph 2,510,000 371,852
Sun Hung Kai Properties Ltd. HK 156,000 1,087,276
Swire Pacific Ltd., Series A .............. HK 173,000 948,979
----------
5,315,144
-----------
Manufacturing--5.8%
Fabricated Metal--0.2%
Kian Joo Can Factory
Berhad ................................. Ma 72,000 64,132
----------
Measuring & Analyzing Instruments--0.6%
China Hong Kong Photo
Products Holdings, Ltd. ................ HK 460,000 115,181
PT Modern Photo Film Reg. In 147,000 42,378
----------
157,559
-----------
Printing & Publishing--4.8%
Singapore Press Holdings
Ltd. ................................... Si 96,800 1,213,955
----------
Rubber & Plastic--0.2%
Nylex Malaysia Berhad ..................... Ma 120,000 46,029
----------
Country
Abbrev. Shares Value
--------- ------------ ------------
Retail Trade--1.6%
Apparel & Accessory Stores--0.5%
Giordano International Ltd. ............... HK 354,000 $ 122,222
----------
Auto Dealers & Gas Stations--1.1%
Cycle & Carriage Ltd. ..................... Si 65,000 268,499
----------
Services--2.4%
Hotels, Camps & Lodging--1.2%
Genting Berhad ............................ Ma 120,600 302,703
----------
Miscellaneous Repair Services--1.2%
Keppel Land Ltd. .......................... Si 210,000 289,569
----------
Transportation,Communication, Electric,
Gas & Sanitary Services--18.0%
Communications--7.0%
Hong Kong
Telecommunications Ltd. ................ HK 526,569 1,084,021
PT Telekomunikasi
Indonesia .............................. In 293,000 154,419
Philippine Long Distance
Telephone ADR .......................... Ph 22,500 506,250
----------
1,744,690
-----------
Electric Services--5.1%
Hong Kong Electric
Holdings Ltd. .......................... HK 332,000 1,261,958
----------
Gas Services--5.9%
Hong Kong and China Gas
Co., Ltd. .............................. HK 662,936 1,283,466
Petronas Gas Berhad ....................... Ma 80,000 182,263
----------
1,465,729
-----------
Wholesale Trade--4.3%
Durable Goods
Li & Fung Ltd. ............................ HK 758,000 1,061,501
----------
Total Common Stocks
(cost of $28,054,686)(a) ..................................... 23,439,892
-----------
SHORT-TERM OBLIGATIONS--3.6%
Par
--------
Repurchase agreement with ABN
AMRO Chicago Corp. dated
12/31/97, due 1/02/98 at
6.600%,collateralized by U.S.
Treasury notes with various
maturities to 2021, market value
$911,141 (repurchase proceeds
$891,327).......................................... $ 891,000 891,000
-----------
Other Assets & Liabilities, Net--2.4%
603,032
-----------
Net Assets--100% ....................................... $24,933,924
===========
Notes to Investment Portfolio:
(a) The cost for federal income tax purposes is identical. Gross unrealized
appreciation and depreciation at December 31, 1997 is as follows:
Gross unrealized appreciation $ 2,549,268
Gross unrealized depreciation (7,164,062)
------------
Net unrealized depreciation $ (4,614,794)
============
See Notes to Financial Statements.
46
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Liberty Variable Investment Trust Newport Tiger Fund, Variable Series /
December 31, 1997
- --------------------------------------------------------------------------------
Summary of Securities by Country
Country
Country Abbrev. Value % of Total
- ------------------------------ --------- ---------- ----------
Hong Kong ........... HK $16,375,719 69.9%
Singapore ........... Si 5,245,165 22.4
Philippines ......... Ph 977,584 4.2
Malaysia ............ Ma 595,127 2.5
Indonesia ........... In 196,797 0.8
Taiwan .............. Tw 49,500 0.2
----------- -----
$23,439,892 100.0%
=========== =====
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
Acronym Name
- ----------- ----------------------------
ADR American Depositary Receipt
See Notes to Financial Statements.
47
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Liberty Variable Investment Trust Newport Tiger Fund, Variable Series /
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $28,054,686) ....................... $ 23,439,892
Short-term obligations ........................................................... 891,000
Cash (including foreign currencies) .............................................. 247,634
Receivable for investments sold .................................................. 421,367
Dividends, tax reclaims and interest receivable .................................. 68,278
Receivable for fund shares sold .................................................. 10,506
------------
Total assets ................................................................... 25,078,677
------------
Liabilities:
Payable for fund shares repurchased .............................................. 92,403
Management fee payable ........................................................... 19,381
Bookkeeping fee payable .......................................................... 2,250
Transfer agent fee payable ....................................................... 625
Accrued expenses payable ......................................................... 30,094
------------
Total liabilities .............................................................. 144,753
------------
Net assets ....................................................................... $ 24,933,924
============
Net assets represented by:
Paid-in capital ................................................................. $ 32,901,012
Accumulated overdistributed net investment income ............................... (62,383)
Accumulated net realized losses on investments and foreign currency transactions (3,286,203)
Net unrealized depreciation on investments and foreign currency transactions .... (4,618,502)
------------
Total net assets applicable to shares of beneficial interest outstanding ......... $ 24,933,924
============
Shares of beneficial interest outstanding ........................................ 14,569,906
============
Net asset value per share ........................................................ $1.71
=====
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Dividends (net of nonrebatable foreign taxes withheld at source of $48,424) $ 708,772
Interest income ............................................................ 97,842
-------------
Total investment income .................................................. 806,614
-------------
Expenses:
Management fee ............................................................ 303,701
Bookkeeping fee ........................................................... 27,000
Transfer agent fee ........................................................ 7,500
Audit fee ................................................................. 15,625
Printing expense .......................................................... 3,484
Trustees' expense ......................................................... 3,547
Custodian fee ............................................................. 53,024
Legal expense ............................................................. 3,192
Miscellaneous expense ..................................................... 4,182
-------------
Total expenses ........................................................... 421,255
-------------
Net investment income ...................................................... 385,359
Realized and unrealized losses on investments and foreign currency transactions:
Net realized losses on investments ........................................ (3,259,158)
Net realized losses on foreign currency transactions ...................... (86,529)
Unrealized depreciation on investments and foreign currency transactions .. (8,619,923)
-------------
Net decrease in net assets resulting from operations ....................... $ (11,580,251)
=============
</TABLE>
See Notes to Financial Statements.
48
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Liberty Variable Investment Trust Newport Tiger Fund, Variable Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, December 31,
1997 1996
---------------- ---------------
<S> <C> <C>
Operations:
Net investment income ........................................................ $ 385,359 $ 343,316
Net realized gains (losses) on investments ................................... (3,259,158) 109,471
Net realized losses on foreign currency transactions ......................... (86,529) (11,295)
Unrealized appreciation (depreciation) on investments and foreign currency
transactions ................................................................ (8,619,923) 2,259,060
------------- ------------
Net increase (decrease) in net assets resulting from operations .............. (11,580,251) 2,700,552
------------- ------------
Distributions declared from:
Net investment income ........................................................ (312,640) (237,595)
In excess of net investment income ........................................... (49,487) --
Net realized gains ........................................................... -- (135,767)
In excess of net realized gains .............................................. (749) --
------------- ------------
Total distributions ........................................................... (362,876) (373,362)
------------- ------------
Fund share transactions:
Proceeds from fund shares sold ............................................... 12,286,867 19,071,741
Cost of fund shares repurchased .............................................. (10,415,067) (6,107,372)
Distributions reinvested ..................................................... 362,876 373,362
------------- ------------
Net increase in net assets resulting from fund share transactions ............. 2,234,676 13,337,731
------------- ------------
Total increase (decrease) in net assets ....................................... (9,708,451) 15,664,921
Net assets:
Beginning of period .......................................................... 34,642,375 18,977,454
------------- ------------
End of period ................................................................ $ 24,933,924 $ 34,642,375
============= ============
Accumulated undistributed (overdistributed) net investment income included
in ending net assets ......................................................... $ (62,383) $ 920
============= ============
Analysis of changes in shares of beneficial interest:
Shares sold .................................................................. 5,307,469 7,766,949
Shares redeemed .............................................................. (4,695,322) (2,495,545)
Distributions reinvested ..................................................... 211,357 148,081
------------- ------------
Net increase .................................................................. 823,504 5,419,485
============= ============
</TABLE>
See Notes to Financial Statements.
49
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Liberty Variable Investment Trust Newport Tiger Fund, Variable Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period Ended
Year Ended December 31, December 31,
--------------------------- -------------
1997 1996 1995***
------------- ----------- -------------
<S> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period ............................. $ 2.52 $ 2.28 $ 2.00
------- ------- -------
Net investment income (a) ........................................ 0.03 0.03 0.01
Net realized and unrealized gains (losses) on investments and
foreign currency transactions ................................... (0.81) 0.24 0.29
-------- ------- -------
Total from investment operations ................................. (0.78) 0.27 0.30
-------- ------- -------
Less distributions from:
Dividends from net investment income ............................ (0.02) (0.02) (0.01)
In excess of net investment income .............................. (0.01) -- (0.01)
Dividends from net realized gains ............................... -- (0.01) --
In excess of net realized gains ................................. -- -- --
-------- ------- --------
Total distributions ............................................. (0.03) (0.03) (0.02)
-------- ------- --------
Net asset value, end of period ................................... $ 1.71 $ 2.52 $ 2.28
======== ======= ========
Total return:
Total investment return (b) ..................................... (31.14)% 11.73% 15.00%**
Ratios/supplemental data:
Net assets, end of period (000) .................................. $24,934 $34,642 $18,977
Ratio of net expenses to average net assets (c) .................. 1.25% 1.27% 1.75%*
Ratio of net investment income to average net assets (c) ......... 1.14% 1.20% 0.89%*
Portfolio turnover ratio ......................................... 27% 7% 12%**
Average commission rate (d) ...................................... $0.0083 $0.0172 --
</TABLE>
* Annualized
** Not Annualized.
*** For the period from the commencement of operations May 1, 1995 to December
31, 1995.
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(d) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged.
Federal Income Tax footnote (unaudited)
None of the gain distribution recorded and paid August 1997 was derived from
long term gains.
See Notes to Financial Statements.
50
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
Liberty Variable Investment Trust Liberty All-Star Equity Fund, Variable Series
/ December 31, 1997
- --------------------------------------------------------------------------------
Shares Value
--------------- ---------
COMMON STOCKS--93.1%
Aerospace--2.1%
Boeing Co. .................................. 7,200 $ 352,350
Lockheed Martin Corp. ....................... 1,200 118,200
---------
470,550
---------
Autos, Tires & Accessories--2.3%
Chrysler Corp. .............................. 3,400 119,638
Eaton Corp. ................................. 1,200 107,100
General Motors Corp. ........................ 2,700 163,688
Goodyear Tire & Rubber Co. .................. 1,000 63,625
Lear Corp. (a) .............................. 1,200 57,000
---------
511,051
---------
Banks--6.5%
ABN AMRO Holding NV ADR ..................... 2,800 54,600
Ahmanson H. F. & Co. ........................ 2,800 187,425
Chase Manhattan Corp. ....................... 2,200 240,900
Citicorp .................................... 1,500 189,656
First Union Corp. ........................... 6,000 307,500
Fleet Financial Group, Inc. ................. 2,500 187,188
U. S. Bancorp ............................... 500 55,969
Washington Mutual, Inc. ..................... 800 51,050
Wells Fargo & Co. ........................... 500 169,719
---------
1,444,007
---------
Business Services--5.2%
Acxiom Corp (a) ............................. 3,300 63,525
Automatic Data Processing, Inc. ............. 2,400 147,300
Catalina Marketing Corp. (a) ................ 1,300 60,125
Cintas Corp. ................................ 2,600 101,400
Concord EFS, Inc. (a) ....................... 3,400 84,575
Fiserv, Inc. (a) ............................ 3,300 162,113
J. D. Edwards & Co. (a) ..................... 1,200 35,400
Oracle Corp. (a) ............................ 4,100 91,481
Robert Half International, Inc. (a) ......... 2,500 100,000
Sitel Corp. (a) ............................. 9,400 85,775
Sterling Commerce, Inc. (a) ................. 1,700 65,344
Sterling Software (a) ....................... 3,100 127,100
Sykes Enterprises, Inc. (a) ................. 2,100 40,950
---------
1,165,088
---------
Chemicals--3.7%
Albemarle Corp. ............................. 1,300 31,038
American Home Products Corp. ................ 2,100 160,781
EI dupont de Nemours & Co. Inc. ............. 1,900 114,119
Monsanto Co. ................................ 3,000 126,000
Morton International, Inc. .................. 3,800 130,625
PPG Industries, Inc. ........................ 1,000 57,125
Praxair, Inc. ............................... 2,700 121,500
Union Carbide Corp. (a) ..................... 1,900 81,581
---------
822,769
---------
Shares Value
------ ---------
Computer & Business Equipment--5.6%
Cisco Systems, Inc. (a) ..................... 1,800 $ 100,350
EMC Corp. (a) ............................... 2,800 76,825
HBO & Co. ................................... 1,400 67,113
Ingram Micro, Inc. Class A (a) .............. 2,900 84,463
Intel Corp. ................................. 1,500 105,375
International Business Machines
Corp. .................................... 3,500 365,969
Microsoft Corp. (a) ......................... 600 77,550
Sun Microsystems, Inc. (a) .................. 2,300 91,713
Tech Data Corp. (a) ......................... 3,400 132,175
Xerox Corp. ................................. 1,900 140,244
---------
1,241,777
---------
Construction--1.3%
Foster Wheeler Corp. ........................ 5,000 135,313
Masco Corp. ................................. 3,000 152,625
---------
287,938
---------
Consumer Products--2.4%
Electronic Arts, Inc. (a) ................... 1,200 45,375
Philip Morris Companies, Inc. ............... 5,300 240,156
Procter & Gamble Co. ........................ 1,200 95,775
Ralston-Ralston Purina Group ................ 1,000 92,938
Unilever NV ADR ............................. 1,000 62,438
---------
536,682
---------
Cosmetics & Toiletries--1.1%
Avon Products, Inc. ......................... 2,500 153,438
Gillette Co. ................................ 800 80,350
---------
233,788
---------
Diversified--2.8%
Allied Signal, Inc. ......................... 2,300 89,413
Cooper Industries, Inc. ..................... 900 44,100
Dover Corp. ................................. 4,000 144,250
General Electric Co. ........................ 1,000 73,375
Loews Corp. ................................. 1,400 148,400
Tyco International Ltd. ..................... 2,600 117,163
---------
616,701
---------
Drugs & Healthcare--6.3%
Crescendo Pharmaceuticals
Corp. (a) ................................ 100 1,163
DENTSPLY International, Inc. ................ 1,900 57,950
Elan Corp. ADR (a) .......................... 2,900 148,444
Genzyme Corp. (a) ........................... 2,200 61,600
HEALTHSOUTH Corp. (a) ....................... 4,000 111,000
Henry Schein, Inc. (a) ...................... 1,300 45,500
Humana, Inc. (a) ............................ 4,800 99,600
Medtronic, Inc. ............................. 2,200 115,225
Merck & Co., Inc. ........................... 900 95,625
Omnicare, Inc. .............................. 2,100 65,100
Pfizer, Inc. ................................ 1,800 134,213
See Notes to Investment Portfolio.
51
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Liberty Variable Investment Trust Liberty All-Star Equity Fund, Variable Series
/ December 31, 1997
- --------------------------------------------------------------------------------
Shares Value
------- ----------
R. P. Scherer Corp. (a) ................. 1,000 $ 61,000
Smithkline Beecham PLC ADR .............. 1,200 61,725
Steris Corp. (a) ........................ 2,200 106,150
Tenet Healthcare Corp. (a) .............. 3,700 122,540
Warner-Lambert Co. ...................... 900 111,600
---------
1,398,435
---------
Electrical Utilities--1.5%
Dominion Resources, Inc. ................ 1,300 55,331
Florida Progress Corp. .................. 1,500 58,875
Houston Industries, Inc. ................ 5,000 133,125
Saville Systems ADR (a) ................. 1,200 49,800
Southern Co. ............................ 1,700 43,988
---------
341,119
---------
Electronics & Electrical Equipment--4.3%
Adaptec, Inc. (a) ....................... 2,000 74,250
Arrow Electronics, Inc. (a) ............. 4,000 129,750
Berg Electronics Corp. .................. 2,600 59,150
General Semiconductor, Inc. (a) ......... 900 10,406
Linear Technology Corp. ................. 2,400 138,000
Molex, Inc. ............................. 3,750 120,469
Motorola, Inc. .......................... 1,600 91,300
Perkin-Elmer Corp. ...................... 900 63,956
Raytheon Co., Class A ................... 172 8,491
Raytheon Co., Class B ................... 2,700 136,350
Sensormatic Electronics Corp. ........... 3,400 55,675
Texas Instrument, Inc. .................. 1,000 45,000
---------
932,797
---------
Financial Services--3.8%
Beneficial Corp. ........................ 1,300 108,063
Countrywide Credit Industries, Inc. ..... 2,500 107,188
Federal Home Loan Mortgage Corp. 3,000 125,813
Federal National Mortgage Co. ........... 1,700 97,006
Morgan Stanley, Dean Witter,
Discover & Co. ......................... 2,000 118,250
Paychex, Inc. ........................... 2,600 131,625
Travelers Group, Inc. ................... 3,000 161,625
---------
849,570
---------
Food, Beverage & Restaurants--4.2%
Anheuser-Busch, Inc. .................... 4,600 202,400
Campbell Soup Co. ....................... 2,100 122,063
Diageo PLC ADR .......................... 3,000 113,625
Dole Food Co. ........................... 2,000 91,500
Dreyers Grand Ice Cream ................. 2,600 62,725
McDonalds Corp. ......................... 2,500 119,375
Starbucks Corp. (a) ..................... 2,500 95,938
Wendy's International, Inc. ............. 5,000 120,313
---------
927,939
---------
Hotels & Leisure--0.3%
Marriott International, Inc. ............ 800 55,400
---------
Shares Value
-------- -----
Industrial Equipment--1.8%
Caterpillar, Inc. ....................... 3,000 $ 145,688
Deere & Co. ............................. 2,100 122,456
JLK Direct Distribution, Inc. (a) ....... 2,100 58,800
York International Corp. ................ 2,000 79,125
---------
406,069
---------
Insurance--5.6%
AFLAC, Inc. ............................. 3,500 178,938
Aon Corp. ............................... 2,500 146,563
Cigna Corp. ............................. 700 121,144
Conseco, Inc. ........................... 2,800 127,050
Marsh & McLennan Companies, Inc. 1,200 89,475
Progressive Corp. ....................... 1,000 119,875
Providian Corp. ......................... 3,900 176,231
Transamerica Corp. ...................... 1,500 159,750
Renaissancere Holdings Ltd. (a) ......... 3,000 132,375
---------
1,251,401
---------
Metals & Mining--1.3%
Allegheny Teledyne, Inc. ................ 3,700 95,738
Aluminum Co. of America ................. 1,700 119,638
Freeport-McMoRan Copper &
Gold, Inc., Class B .................. 5,000 78,750
---------
294,126
---------
Oil & Gas--8.5%
Apache Corp. ............................ 1,600 56,100
Atlantic Richfield Co. .................. 1,100 88,138
Baker Hughes, Inc. ...................... 2,800 122,150
Burlington Resources, Inc. .............. 1,300 58,256
ELF Aquitaine ADR ....................... 2,200 128,975
Enron Corp. ............................. 1,400 58,013
Exxon Corp. ............................. 1,500 91,781
Kerr-McGee Corp. ........................ 2,200 139,288
Mobil Corp. ............................. 3,800 274,313
PGE Resource Corp. ...................... 1,400 42,613
Pennzoil Co. ............................ 1,700 113,581
Pioneer Natural Resources, Co. .......... 1,900 54,981
Royal Dutch Petroleum Co. ADR ........... 1,200 65,025
Texaco, Inc. ............................ 4,000 217,500
Tosco Corp. ............................. 3,800 143,688
Triton Energy Corp. (a) ................. 3,000 87,563
Union Pacific Resources Group ........... 6,300 152,775
---------
1,894,740
---------
Paper--0.8%
Champion International Corp. ............ 2,500 113,125
Temple Inland, Inc. ..................... 1,400 73,238
---------
186,363
---------
Pollution Control--0.3%
Waste Management, Inc. .................. 2,500 68,750
---------
See Notes to Investment Portfolio.
52
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Liberty Variable Investment Trust Liberty All-Star Equity Fund, Variable Series
/ December 31, 1997
- --------------------------------------------------------------------------------
Shares Value
------- -------------
Publishing--1.5%
American Greetings Corp., Class A ...... 3,000 $ 117,375
Gannett Co., Inc. ...................... 900 55,631
R. R. Donnelley & Sons Co. ............. 3,000 111,750
Time Warner, Inc. ...................... 900 55,800
-----------
340,556
-----------
Real Estate Investment Trust--1.6%
Crescent Real Estate Equities Co. ...... 1,600 63,000
Patriot American Hospitality, Inc. ..... 1,900 54,744
Rouse Co. .............................. 3,300 108,075
Starwood Lodging Trust ................. 1,100 63,663
Vornado Realty Trust ................... 1,300 61,019
-----------
350,501
-----------
Retail Trade--7.4%
Arbor Drugs, Inc. ...................... 4,200 77,700
CDW Computer Centers, Inc. (a) ......... 1,300 67,763
Circuit City Stores, Inc. .............. 2,400 85,350
Corporate Express, Inc. (a) ............ 5,400 69,525
CVS Corp. .............................. 1,700 108,906
Dollar General Corp. ................... 1,650 59,813
Family Dollar Stores ................... 2,200 64,488
Fastenal Co. (a) ....................... 2,700 103,275
Federated Department Stores,
Inc. (a) ............................ 1,200 51,675
Home Depot, Inc. ....................... 1,800 105,975
May Department Stores Co. .............. 4,100 216,019
MSC Industrial Direct Co. (a) .......... 2,300 96,600
Quality Food Centers, Inc. (a) ......... 2,000 134,000
Staples, Inc. (a) ...................... 5,000 139,375
Tiffany & Co. .......................... 1,200 43,275
Toys R Us, Inc. (a) .................... 2,400 75,300
Walgreen Co. ........................... 2,600 81,575
Wal-Mart Stores, Inc. .................. 1,600 63,100
-----------
1,643,714
-----------
Telecommunications--8.0%
ADC Telecommunications, Inc. (a) ....... 1,700 71,188
Bay Networks, Inc. (a) ................. 3,500 89,469
Bell Atlantic Corp. .................... 1,200 109,050
Brightpoint, Inc. (a) .................. 2,800 38,675
CommScope, Inc. (a) .................... 3,800 51,063
GTE Corp. .............................. 3,600 188,100
Lucent Technologies, Inc. .............. 1,500 119,813
MCI Communications Corp. ............... 1,100 47,094
Nextlevel Systems, Inc. (a) ............ 3,800 67,925
Nokia Corp. ADR ........................ 2,000 140,000
SBC Communications, Inc. ............... 4,700 344,275
Scientific Atlanta, Inc. ............... 6,300 105,525
Shares Value
-------- ------------
Sprint Corp. ........................... 2,000 $ 116,875
Tele Communications--TCI
Ventures, Class A (a) ............... 1,800 50,963
US West Media Group (a) ................ 3,200 92,400
Worldcom, Inc. (a) ..................... 4,700 142,175
-----------
1,774,590
-----------
Transportation--2.9%
AMR Corp. (a) .......................... 1,000 128,625
Burlington Northern Santa Fe ........... 1,600 148,700
CSX Corp. .............................. 1,700 91,800
Ryder System, Inc. ..................... 3,700 121,175
Union Pacific Corp. .................... 2,400 149,850
-----------
640,150
-----------
Total Common Stocks
(cost of $20,544,616) ..................................... 20,686,571
-----------
PREFERRED STOCKS--0.2%
Electrical Utilities
Houston Industries, Inc. 7%
Convertible
(cost of $56,676) ................... 1,000 57,063
-----------
Total Investments--93.3%
(cost of $20,601,292) ..................................... 20,743,634
-----------
Par
SHORT-TERM OBLIGATIONS--3.2%
Repurchase Agreement with ABN
AMRO Chicago Corp., dated
12/31/97, due 01/02/98 at
6.600%, collateralized by U.S.
Treasury notes with various
maturities to 2016, market value
$726,049 (repurchase proceeds
$710,260) ........................... $710,000 710,000
-----------
Other Assets and Liabilities, Net--3.5%
773,957
-----------
Net Assets--100.0%) ........................................ $22,227,591
-----------
Notes to Investment portfolio:
(a) Non-income producing.
(b) The cost for federal income tax purposes is identical. Gross unrealized
appreciation and depreciation of investments at December 31, 1997 is as
follows:
Gross unrealized appreciation $ 846,563
Gross unrealized depreciation (704,221)
----------
Net unrealized appreciation $ 142,342
==========
Acronym Name
- ----------- ----------------------------
ADR American Depositary Receipt
See Notes to Financial Statements.
53
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Liberty Variable Investment Trust Liberty All-Star Equity Fund, Variable Series
/ December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $20,601,292) .............. $20,743,634
Short-term obligations .................................................. 710,000
Cash (including foreign currencies) ..................................... 8,050
Receivable for fund shares sold ......................................... 905,246
Dividends and interest receivable ....................................... 18,258
Expense reimbursement due from Adviser .................................. 11,533
-----------
Total assets .......................................................... 22,396,721
-----------
Liabilities:
Payable for investments purchased ....................................... 142,976
Management fee payable .................................................. 15,245
Bookkeeping fee payable ................................................. 2,250
Transfer agent fee payable .............................................. 625
Accrued expenses payable ................................................ 8,034
-----------
Total liabilities ..................................................... 169,130
-----------
Net assets .............................................................. $22,227,591
===========
Net assets represented by:
Paid-in capital ........................................................ $22,089,534
Accumulated overdistributed net investment income ...................... (67)
Accumulated net realized losses on investments ......................... (4,218)
Net unrealized appreciation on investments ............................. 142,342
-----------
Total net assets applicable to shares of beneficial interest outstanding $22,227,591
===========
Shares of beneficial interest outstanding ............................... 2,208,036
===========
Net asset value per share ............................................... $10.07
======
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Period Ended December 31, 1997*
- --------------------------------------------------------------------------------
Investment income:
Dividends .................................................... $ 29,481
Interest income .............................................. 16,990
---------
Total investment income .................................... 46,471
---------
Expenses:
Management fee .............................................. 20,337
Bookkeeping fee ............................................. 3,225
Transfer agent fee .......................................... 896
Audit fee ................................................... 7,000
Printing expense ............................................ 1,500
Custodian fee ............................................... 3,500
Miscellaneous expense ....................................... 500
---------
Total expenses ............................................. 36,958
---------
Less:
Expenses reimbursable by Manager ............................ (11,533)
---------
Net expenses ................................................. 25,425
---------
Net investment income ........................................ 21,046
Realized and unrealized gains (losses) on investments:
Net realized losses on investments .......................... (4,218)
Change in unrealized appreciation on investments ............ 142,342
---------
Net increase in net assets resulting from operations ......... $ 159,170
=========
* For the period from the commencement of operations November 17, 1997 to
December 31, 1997.
See Notes to Financial Statements.
54
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Liberty Variable Investment Trust Liberty All-Star Equity Fund, Variable Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period Ended
December 31,
1997*
---------------
<S> <C>
Operations:
Net investment income .............................................................. $ 21,046
Net realized losses on investments ................................................. (4,218)
Unrealized appreciation on investments ............................................. 142,342
-----------
Net increase in net assets resulting from operations ............................... 159,170
-----------
Distributions declared from:
Net investment income .............................................................. (21,113)
-----------
Fund share transactions:
Proceeds from fund shares sold ..................................................... 22,104,982
Cost of fund shares repurchased .................................................... (36,561)
Distributions reinvested ........................................................... 21,113
-----------
Net increase in net assets resulting from fund share transactions ................... 22,089,534
-----------
Total increase in net assets ........................................................ 22,227,591
Net assets:
Beginning of period ................................................................ 0
-----------
End of period ...................................................................... $22,227,591
===========
Accumulated overdistributed net investment income included in ending net assets ..... $ (67)
===========
Analysis of changes in shares of beneficial interest:
Shares sold ........................................................................ 2,209,591
Shares redeemed .................................................................... (3,658)
Distributions reinvested ........................................................... 2,103
-----------
Net increase ........................................................................ 2,208,036
===========
</TABLE>
* For the period from the commencement of operations November 17, 1997 to
December 31, 1997.
See Notes to Financial Statements.
55
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Liberty Variable Investment Trust Liberty All-Star Equity Fund, Variable Series
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period Ended
December 31,
-------------
1997***
-------------
<S> <C>
Per share operating performance:
Net asset value, beginning of period ................................ $ 10.00
--------
Net investment income (a) ........................................... 0.01
Net realized and unrealized gains on investments (a) ................ 0.07
--------
Total from investment operations .................................... 0.08
--------
Less distributions from:
Dividends from net investment income ............................... (0.01)
--------
Net asset value, end of period ...................................... $ 10.07
========
Total return:
Total investment return (b)(c) ..................................... 0.80%* *
Ratios/supplemental data:
Net assets, end of period (000) ..................................... $22,228
Ratio of net expenses to average net assets (d)(e) .................. 1.00%*
Ratio of net investment income to average net assets (c)(e) ......... 0.83%*
Portfolio turnover ratio ............................................ 1%**
Average commission rate ............................................. $0.0475
</TABLE>
* Annualized
** Not Annualized.
*** For the period from the commencement of operations November 17, 1997 to
December 31, 1997.
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Computed giving effect to Manager's expense limitation undertaking.
(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, this ratio would have been 1.45%
(annualized).
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
See Notes to Financial Statements.
56
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note 1. Organization and Accounting Policies
Liberty Variable Investment Trust (the "Trust"), formerly Keyport Variable
Investment Trust, an open-end management investment company, was organized as a
Massachusetts business trust on March 4, 1993. At December 31, 1997 the Trust
consisted of seven series of Funds, each with its own investment objective,
policies and restrictions: Colonial Growth and Income Fund, Variable Series,
formerly Colonial-Keyport Growth and Income Fund ("Growth and Income Fund"),
Stein Roe Global Utilities Fund, Variable Series, formerly Colonial-Keyport
Utilities Fund ("Global Utilities Fund"), Colonial International Fund for
Growth, Variable Series, formerly Colonial-Keyport International Fund for
Growth ("International Fund for Growth"), Colonial Strategic Income Fund,
Variable Series, formerly Colonial-Keyport Strategic Income Fund ("Strategic
Income Fund"), Colonial U.S. Stock Fund, Variable Series, formerly
Colonial-Keyport U.S. Stock Fund ("U.S. Stock Fund"), Newport Tiger Fund,
Variable Series, formerly Newport-Keyport Tiger Fund ("Tiger Fund") and Liberty
All-Star Equity Fund, Variable Series ("All-Star Equity Fund") (individually
referred to as a "Fund", or collectively referred to as the "Funds"). Each
Fund's objective is as follows:
Growth and Income Fund seeks primarily income and long-term capital growth and,
secondarily, preservation of capital.
Global Utilities Fund seeks current income and long-term growth of capital and
income.
International Fund for Growth seeks long-term capital growth, by investing
primarily in non-U.S. equity securities. The Fund is non-diversified and may
invest more than 5% of its total assets in the securities of a single issuer,
thereby increasing the risk of loss compared to a diversified fund.
Strategic Income Fund seeks a high level of current income, as is consistent
with prudent risk and maximizing total return, by diversifying investments
primarily in U.S. and foreign government and high yield, high risk corporate
debt securities.
U.S. Stock Fund seeks long-term capital growth by investing primarily in large
capitalization equity securities.
Tiger Fund seeks long-term capital growth by investing primarily in equity
securities of companies located in the nine Tigers of Asia (Hong Kong,
Singapore, South Korea, Taiwan, Malaysia, Thailand, Indonesia, China and the
Philippines).
All-Star Equity Fund seeks total investment return, comprised of long-term
capital appreciation and current income, through investment primarily in a
diversified portfolio of equity securities.
Shares of the Trust are available and are being marketed exclusively as a
pooled funding vehicle for variable annuity contracts ("VA contracts") and
Variable Life Insurance Policies ("VLI Policies") offered by the separate
accounts of life insurance companies ("Participating Insurance Companies").
Certain Participating Insurance Companies are affiliated with the Investment
Adviser and sub-advisers to the Funds ("Affiliated Participating Insurance
Companies"). Such Affiliated Participating Insurance Companies are Keyport Life
Insurance Company ("Keyport"), Independence Life & Annuity Company
("Independence") and Liberty Life Assurance Company of Boston ("Liberty Life").
The Participating Insurance Companies and their separate accounts own all the
shares of the Funds. Liberty Advisory Services Corp. (the Manager) ("LASC"),
formerly Keyport Advisory Services Corp., provides investment management and
advisory services to the Funds pursuant to its Management Agreements with the
Trust. Colonial Management Associates, Inc. ("Colonial") provides sub-advisory
services to four Funds: Growth and Income Fund, International Fund for Growth,
U.S. Stock Fund and Strategic Income Fund. Stein Roe & Farnham Incorporated
("Stein Roe") provides sub-advisory services to Global Utilities Fund. Newport
Fund Management, Inc. ("Newport") provides sub-advisory services to Tiger Fund.
Liberty Asset Management Company ("LAMCO") provides sub-advisory services to
the All-Star Equity Fund. LASC has delegated various administrative matters to
Colonial. Colonial also provides transfer agency and pricing and record keeping
services to the Trust. Keyport Financial Services Corp. ("KFSC") serves as the
principal underwriter of the Trust with respect to sales of shares to
Affiliated Participating Insurance Companies. The Manager, Colonial, Stein Roe,
Newport, LAMCO, KFSC, Keyport and Independence are wholly-owned indirect
subsidiaries of Liberty Financial Companies, Inc. ("LFC"). Liberty Mutual
Insurance Companies ("Liberty Mutual") owns approximately 75% of the
outstanding voting shares of LFC. Liberty Life is a subsidiary of Liberty
Mutual.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements. The preparation of
financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Valuation of Investments--Portfolio securities listed on an exchange and
over-the-counter securities quoted on the NASDAQ system generally are valued on
the basis of the last sale on the date as of which the valuation is made, or,
lacking any sales, at the current bid prices. Over-the-counter securities not
quoted on the NASDAQ system generally are valued at the latest bid quotation.
Long-term debt securities generally are valued on the basis of dealer-supplied
quotations or valuations furnished by a pricing service which may employ
electronic data processing techniques, including a "matrix" system to determine
the valuations. Foreign debt securities are valued at the current bid price
furnished by market makers. Foreign equity securities listed on an exchange are
valued on the basis
57
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
of last sale on the date as of which the valuation is made, or lacking any
sales, at the current bid prices. Forward currency contracts are valued based
on the weighted value of the exchange traded contracts with similar durations.
In certain countries, the Fund may hold foreign designated shares. If the
foreign share price is not readily available as a result of limited share
activity, the securities are valued at the last sale price of the local shares
in the principal market in which such securities are normally traded. Korean
equity securities that have reached the limit for aggregate foreign ownership
and for which premiums to the local exchange prices may be paid by foreign
investors are valued by applying a broker quoted premium to the local share
price. Securities for which reliable quotations are not readily available are
valued at fair value, as determined in good faith and pursuant to procedures
established by the Trustees. Short-term instruments with remaining maturities
of 60 days or less are valued at amortized cost unless the Trustees determine
this does not represent fair value.
Federal Income Taxes--The Funds intend to qualify as "regulated investment
companies" and as such (and by complying with the applicable provisions of the
Internal Revenue Code) will not be subject to Federal income tax on taxable
income (including realized capital gains) distributed to shareholders. By
making the distributions required under the Internal Revenue Code, the Funds
intend to avoid excise tax liability.
Organization Expenses--Costs incurred in connection with the organization and
offering of the Funds are being deferred and amortized over 60 months from the
date those Funds commenced business.
Delayed Delivery Transactions--Growth and Income Fund and Strategic Income
Fund may purchase or sell securities on a when-issued or forward commitment
basis. Payment and delivery may take place a month or more after the date of
the transaction. The price of the underlying securities and the date when the
securities will be delivered and paid for are fixed at the time the transaction
is negotiated. This may increase the risk if the other party involved in the
transaction fails to deliver and causes the Funds to subsequently invest at
less advantageous prices. The Funds identify securities as segregated in their
custodial records with a value at least equal to the amount of the purchase
commitment.
Expenses--Most expenses of the Trust can be attributed to a Fund. Expenses
which cannot be directly attributed are apportioned among the Funds in the
Trust.
Other--Security transactions are accounted for on trade date. Interest income
is recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date. Net realized and unrealized gains (losses) on foreign
currency transactions include gains (losses) arising from the fluctuation in
exchange rates between trade and settlement dates on security transactions,
gains (losses) arising from the disposition of foreign currency, and currency
gains (losses) between the accrual and payment dates on dividend and interest
income and foreign withholding taxes. The Funds do not isolate that portion of
the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gains (losses) from investments. The Funds may enter into forward
currency contracts to purchase or sell foreign currencies at predetermined
exchange rates in connection with the settlement of purchases and sales of
securities. The contracts are used to minimize the exposure to foreign exchange
rate fluctuations during the period between trade and settlement date of the
contracts. The Funds may also enter into forward currency contracts to hedge
certain other foreign currency denominated assets. All contracts are
marked-to-market daily, resulting in unrealized gains (losses) which become
realized at the time the forward currency contracts are closed or mature.
Realized and unrealized gains (losses) arising from such transactions are
included in net realized and unrealized gains (losses) on foreign currency
transactions. Forward currency contracts do not eliminate fluctuations in the
prices of the Funds' portfolio securities. While the maximum potential loss
from such contracts is the aggregate face value in U.S. dollars at the time the
contract was opened, exposure is typically limited to the change in value of
the contract (in U.S. dollars) over the period it remains open. Risks may also
arise if counterparties fail to perform their obligations under the contracts.
Note 2. Fund Share Transactions
Each Fund's capitalization consists of an unlimited number of shares of
beneficial interest without par value that represent a separate series of the
Trust. Each share of a Fund represents an equal proportionate beneficial
interest in that Fund and, when issued and outstanding, is fully paid and
nonassessable. Shareholders would be entitled to share proportionally in the
net assets of a Fund available for distribution to shareholders upon
liquidation of a Fund.
Note 3. Security Transactions
Realized gains (losses) are computed on the identified cost basis for both
financial reporting and Federal income tax purposes.
The cost of investments purchased and proceeds from investments sold excluding
short-term investments for the year ended December 31, 1997, for the Funds were
as follows:
Growth Global International
and Income Utilities Fund for
Fund Fund Growth
-------------- -------------- --------------
Cost of investments
purchased ................ $52,186,481 $40,067,128 $8,158,992
Proceeds from
investments sold ......... 57,731,015 43,464,862 7,635,191
58
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
Strategic All-Star
Income U.S. Stock Tiger Equity
Fund Fund Fund Fund
-------------- -------------- -------------- ------------
Cost of investments
purchased .......... $70,625,336 $61,311,996 $10,766,739 $20,751,094
Proceeds from
investments sold ... 53,152,025 45,426,691 8,288,901 145,583
For Growth and Income Fund and Strategic Income Fund, $11,749,449 and
$9,347,277 and $11,642,307 and $3,036,191, respectively, represent the purchase
cost and proceeds of sales of U.S. Government securities, respectively.
At December 31, 1997, Tiger Fund had capital loss carryovers of $2,436,000
which will expire in or before 2005, if not utilized.
Note 4. Distributions to Shareholders
The Funds intend to distribute as dividends or capital gain distributions, at
least annually, substantially all of their net investment income and net
profits realized from the sale of investments. All dividends and distributions
are reinvested in additional shares of the Funds at net asset value as of the
record date of the distribution. Income and capital gain distributions are
determined in accordance with Federal Income tax regulations, which may differ
from generally accepted accounting principles. The character of income and
gains to be distributed are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
Reclassifications are made to the Fund's capital accounts to reflect income and
gains available for distribution (or available capital loss carryforwards)
under income tax regulations. Accordingly, amounts as of December 31, 1997 have
been reclassified as follows:
<TABLE>
<CAPTION>
Inter-
Growth national
and Global Fund Strategic
Income Utilities for Income Tiger
Fund Fund Growth Fund Fund
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Accumulated net
investment
income ................ $(20,128) $(42,538) $184,388 $278,997 $(86,535)
Accumulated net
realized gains
(losses) .............. 8,403 42,538 (352,388) (277,996) 86,535
Paid in capital ......... 11,725 -- 168,000 (1,001) --
</TABLE>
In all cases net assets were not affected by these changes.
Note 5. Fees and Compensation Paid to Affiliates
Management and Sub-Advisory Fees--The Funds have management and sub-advisory
agreements with the Manager, Colonial, Stein Roe, Newport and LAMCO,
respectively. For all the Funds, the management fee to be paid to the Manager
is computed daily and paid monthly based upon the average daily net assets of
the Funds at annual rates as follows:
Annual Rate
as a Percent
of Average
Daily
Fund Net Assets
- --------------------------------------- -------------
Growth and Income Fund ................ 0.65 of 1%
Global Utilities Fund ................. 0.65 of 1%
International Fund for Growth ......... 0.90 of 1%
Strategic Income Fund ................. 0.65 of 1%
U.S. Stock Fund ....................... 0.80 of 1%
Tiger Fund ............................ 0.90 of 1%
All-Star Equity Fund .................. 0.80 of 1%
The Manager, out of the management fee it receives from the Funds, pays
Colonial, Stein Roe, Newport and LAMCO a sub-advisory fee based upon the
average daily net assets of the Funds at annual rates as follows:
Annual Rate
as a Percent
of Average
Daily
Fund Net Assets
- --------------------------------------- -------------
Growth and Income Fund ................ 0.45 of 1%
Global Utilities Fund ................. 0.45 of 1%
International Fund for Growth ......... 0.70 of 1%
Strategic Income Fund ................. 0.45 of 1%
U.S. Stock Fund ....................... 0.60 of 1%
Tiger Fund ............................ 0.70 of 1%
All-Star Equity Fund .................. 0.60 of 1%
Bookkeeping Fee--Colonial provides bookkeeping and pricing services to each
Fund for $27,000 per year plus 0.035% of the Fund's average daily net assets
over $50 million.
Transfer Agent Fee--Each of the Funds paid Colonial Investor Services, Inc.,
an affiliate of Colonial, for transfer agent services rendered at an annual
rate of $7,500.
Expense Reimbursement--Through April 30, 1998, the Manager has agreed to
reimburse all expenses, including management fees, in excess of 1.00% of
average daily net assets for Growth and Income Fund, Global Utilities Fund,
U.S. Stock Fund, and All-Star Equity Fund, in excess of 0.80% of average daily
net assets for Strategic Income Fund and in excess of 1.75% of average daily
net assets for International Fund for Growth and Tiger Fund.
Note 6. Investment in Repurchase Agreements
Each Fund may enter into repurchase agreements, which require the seller of the
instrument to maintain on deposit with the Funds' custodian bank or in the
Federal Reserve Book-Entry System securities in the amount at all times equal
to or in excess of the value of the repurchase agreement plus accrued interest.
The Funds may experience costs and delays in liquidating the collateral if the
issuer defaults or enters bankruptcy.
59
<PAGE>
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<PAGE>
Liberty Variable Investment Trust
Adviser
Liberty Advisory Services Corp.
125 High Street
Boston, Massachusetts 02110
Sub-Investment Adviser and
Transfer and Dividend Disbursing Agent
Colonial Management Associates, Inc.
One Financial Center
Boston, Massachusetts 02111-2365
Sub-Investment Adviser
Stein Roe & Farnham, Inc.
One South Wacker Drive
Chicago, Illinois 60606
Newport Fund Management
580 California Street
Suite 1960
San Francisco, California 94104
Liberty Asset Management Company
Federal Reserve Plaza
600 Atlantic Avenue
Boston, Massachusetts 02110
Distributor
Keyport Financial Services Corp.
125 High Street
Boston, Massachusetts 02110
Client Services
Keyport Life Insurance Company
125 High Street
Boston, Massachusetts 02110
800-367-3653 (Press 3)
Custodians
Boston Safe Deposit & Trust Company
One Cabot Road
Medford, Massachusetts 02155
The Chase Manhattan Bank
3 Chase Metrotech Center
Brooklyn, New York 11245
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110
Legal Counsel
Bingham, Dana & Gould
150 Federal Street
Boston, Massachusetts 02110
The Trustees
John A. Bacon Jr.
Richard R. Christensen
Salvatore Macera
Dr. Thomas E. Stitzel
This report is authorized for use as sales literature only when accompanied by
a current prospectus of the Trust and a current prospectus for a variable
insurance product offered by Keyport Life Insurance Company, Independence Life
& Annuity Company, or Liberty Life Assurance Company of Boston.
12/97 NIM 30m
